Ukraine’s hard currency bonds extended their losses after the US House of Representatives approved the financial and military aid package.

According to Bloomberg, Ukrainian currency bonds initially jumped after the US House of Representatives approved a financial and military aid package worth nearly $61B.

However, positive sentiment eroded as bondholders faced tough talks with the war-turn nation about another debt restructuring. Bonds maturing in 2026, which fell to a one-month low last week, rose 0.9 cents to over $0.33 in early London trading, the best performer among emerging market dollar bonds.

“The approval of the aid package came as a big relief to investors, who are increasingly concerned that Russia could once again seize the initiative on the battlefield,” analysts said.

The promise of further assistance had boosted optimism, though Ukraine faces difficult talks with bondholders ahead of the expiry of a two-year halt in payments, which it negotiated after Russia’s invasion in 2022.