Ukraine, Creditors Fail to Strike Last-Gasp Debt Deal

Ukraine and its biggest creditors failed to strike a deal Thursday on the second day of talks aimed at finding a workable solution for keeping the ex-Soviet country from hurtling into default.

A brief joint statement issued by Ukraine's finance ministry and the Ad-hoc Committee of Noteholders to Ukraine said the discussions were "detailed" but provided no immediate guidance as to the progress made.

"The Ukrainian delegation and the ad hoc creditors' committee held detailed discussions in San Francisco. Talks are on going," it said.

A source close to the discussions said that no person-to-person talks at the headquarters of the Franklin Templeton investment giant on the outskirts of San Francisco had been planned for Friday.

"Discussions will continue over the phone," the person told Agence France Presse.

Templeton and three other financial titans hold two-thirds of the $15.3 billion in savings that cash-strapped Ukraine is seeking on its total foreign debt over the coming four years.

The group has refused to accept any major reduction to its bonds' face value and wants a proposed maturity extension to expire as soon as Ukraine's imploding economy returns to growth.

Sources said the bondholders have put strict conditions on a proposed write-down of between five and 10 percent -- well off the 40 percent figure originally sought by Kiev.

Ukrainian Finance Minister Natalie Jaresko has since submitted a number of counter-proposals whose details remain private but reportedly include a smaller write-down request.

The U.S.-born Ukrainian finance chief has called this round of discussions "final" and threatened to impose a payment freeze on Eurobond interest and principal payments that come due in the coming weeks.