Ukraine has initiated negotiations to restructure payments on its GDP warrants.

A group of warrant holders has signed non-disclosure agreements and commenced limited negotiations with the Ukrainian side last week. In-person meetings are anticipated this week in Washington as part of the IMF and World Bank meetings. One of the options under consideration includes a partial cash payment and a partial payment in bonds for an obligation valued at approximately $500M, maturing on May 31.

Among the negotiation participants are hedge funds Aurelius Capital Management LP and VR Capital Group. Currently, there are $2.6B in outstanding GDP warrants that were not included in last year’s debt restructuring agreement for Ukraine’s $20B debt. The warrants, linked to economic growth, were trading at around $0.73 per $1 on Tuesday, down from nearly $0.88 in February. Ukraine has engaged Rothschild & Co and White & Case LLP as its financial and legal advisors.