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. Last Updated: 07/27/2016

Talks on Restructuring Debts Begin

LONDON -- Russia's commercial creditors, the so-called London Club, began Wednesday the latest round of what are expected to be a protracted series of talks with Russia on a possible restructuring of $32 billion in Soviet-era debt.

This week's negotiations, which bankers say may last up to two days, take place in London and follow preliminary talks in August with Russian Finance Minister Mikhail Kasyanov, who hopes to seal a deal by the year's end.

Several more rounds of talks are expected before then.

No press conference or news release is scheduled at present, Russian Embassy and London Club officials said.

"It's totally open," said a spokesman at Deutsche Bank, which chairs the London Club's loose grouping of commercial bank members.

London Club sources said reaching agreement would likely take time.

Many analysts expect Russia will ask for debt forgiveness, lower interest payments and a long grace period.

In return, it may offer to swap the debt, which has already been restructured into bonds known as PRINs and IANs, for more senior bonds with Eurobond status.