Ukraine could still avoid a risk of full insolvency on sovereign bonds via restructuring of payments, according to experts from leading investment banks.

Analysts in Deutsche Bank said in the survey devoted to the situation in Ukraine paid attention to the fact that Ukraine's total foreign debt is comparatively low. The main difficulty for its servicing is the fact that Ukraine's debt service burden is very much front-loaded.

"This lends a convenient support to a soft PSI (private sector involvement) of debt re-profiling with a simple debt swap to extend maturities for bonds due within next three years," Deutsche Bank said.

The experts do not rule out other scenarios for debt re-profiling – distressed restructuring with a 50% haircut across the board and extension of maturity plus a soft restructuring: a combination of above two scenarios but with only 25% haircut.

"The results show that none of the scenarios offer much of a relief on the debt stock, but the soft re-profiling option would reduce next three years’ debt service cost significantly, which will more than cover the additional official support needed. In addition, the combination scenario will reduce debt service cost significantly and achieve a moderate relief in debt sustainability," experts of Deutsche Bank said.

An analyst from Merill Lynch Vadym Khramov sticks to the similar assessments. He said that it is more likely that Ukraine suffers from a lack of liquidity and the country does not have problems with the stability of its debt.

"If Ukraine decides to refinance its foreign liabilities, one could expect that eurobonds will be prolonged with miner write-downs of the principal of the debt and coupons, or without them," he said.

The expert said that anyway the debt re-profiling remains the key scenario for Ukraine. He predicts that it could happen in late 2015 or early 2016.

Experts from Goldman Sachs are the most pessimistic about Ukraine. In their survey they said that Ukraine faces three types of issues: 1) liquidity; 2) debt service; and 3) stock of debt. In the event of a restructuring, the appropriate policy to address these would therefore be a combination of maturity extension, reduced coupons and principal write-down.

"Our sovereign haircut model – using updated forecasts for debt metrics – suggests that, in the event of a debt restructuring, the NPV haircut would likely stand at over 70%, given a larger debt stock and higher share of (senior) multilateral debt. An auxiliary model based on past restructuring episodes puts the implied principal write-down at around 45%," reads the survey.

The bank said that restructuring talks could commence in Q1, 2015 with the IMF review.

"The IMF can only continue lending to Ukraine if it deems the country’s debt sustainable with high probability. Given questions over sustainability and a large financing gap (of some US$15bn), the IMF may make any increase in lending to Ukraine conditional on the commencement of restructuring talks with private creditors, which could begin as early as February-March," they said.

Goldman Sachs said that political considerations matter and continue to present risks.

"In our view, the largest uncertainty continues to stem from the political aspect of the decision-making process. In addition, any assessment of Ukraine’s debt sustainability depends heavily on assumed trend growth rates, which are highly uncertain and also depend on political outcomes," reads the survey.

An analyst from JPMorgan Nicolaie Alexandru said that given that Ukraine faces a severe liquidity problem against a backdrop of low FX reserves and large external public and private sector repayments, PSI may well be needed.

"If demand pressure from the private sector experiencing difficulties in rolling over its foreign currency debt compels the NBU to sell USD to stabilize the FX market, then Ukraine would likely need more than $28.3bn of official support in 2015. The low level of FX reserves further complicates the situation as confidence in the currency is declining and severely limits NBU capabilities to stabilize the UAH even with significant sales of USD," he said.

"We see at least two main benefits of hard PSI: (i) reduction of the large financing needs of the Ukrainian economy and, to some extent, of the debt to GDP profile, and (ii) improved confidence in Ukraine’s financing situation, which would eventually allow both corporates and the sovereign to borrow externally and roll over external debt," he said.

"The main counter-arguments to restructuring are: (i) geopolitical sensitivities about prompting Ukraine to restructure its debt given the crisis with Russia, and (ii) the low share of eurobonds in external debt, which suggests that restructuring would not achieve much in terms of lowering the overall debt-to-GDP ratio," the expert said.