Why Ukraine Needs a New Deal With Its Bondholders

Ukraine has just a few weeks left before a two-year moratorium on $20 billion of bonds ends and it has to resume interest payments to private creditors. Talks about a restructuring have so far failed to yield a deal, with the parties at loggerheads over how much of their investment bondholders should sacrifice.

With Russia’s full-scale invasion now in its third year, Ukraine wants to lower its debt payments to save limited resources for the battlefield and to keep government services functioning. At the same time, Kyiv needs to maintain good relations with creditors for the reconstruction of its economy once the fighting eventually ends.