The Institute of International Finance, which counts 500 major global financial institutions as its members, said the $40 billion rescue of the embattled country appears to include $15 billion that would come from non-payment of Ukraine debt held by private sector investors.
A leading international banking group expressed concern Wednesday over talks for a new international bailout of Ukraine that could hit private bondholders.
Ondrej Schneider, an IIF expert recently returned from a mission to Kiev, said the private sector was not being consulted in the talks between the Ukraine government and major official creditors led by the International Monetary Fund.
"Besides the cash from the IMF and other donors, there's about $15 billion in non-payment of the debt. And the concern is that this is included in the program even before negotiations with private bondholders have started," he said.
"So the private sector is expected to contribute without any consultation. This is not a very friendly way to do these things."
Schneider said the country has to pay $15 billion in debt service through 2018.
"What the IMF program assumed is a... non-payment," he told reporters in a conference call.
The IMF announced on February 12 that talks on the second bailout deal in a year for Ukraine will involve about $40 billion in assistance, with $17.5 billion from the Fund itself.
The rest is to come from bilateral and multilateral official lenders and, Schneider said, from private bondholders.
He said it would be unfeasible to cancel the $15 billion owed to bondholders over the next four years. Instead, he expected the proposal is a "reprofiling" of debt payments, which means nothing is paid for four years.
But he complained that private creditors were not being kept in the loop on the plan.
"Everybody understands the situation is very, very bad, the country is in a war, they're losing the war. And at the same time there still seems to be a lack of strategic coordination on the highest level."
He added that even the $40 billion program is not going to be enough "unless the government is able to come up with a deep structural and coordinated reforms."