Ukraine’s other crisis

Nation struggles to service debt to Wall Street

Ukraine is facing a fresh battle on the economic front — this time over millions of dollars in interest payments the war-ravaged nation owes on debts to Wall Street, The Post has learned.

Volodomyr Zelensky’s cash-strapped government wants to restructure a $3 billion bond and is also seeking approval by Aug. 9 to delay a roughly $75 million interest payment to a lending group that includes Franklin Templeton, Blackrock and Aurelius Capital Management, a source with direct knowledge of the situation said.

Ukraine is losing $5 billion a month as it struggles to fend off the Russian invasion, a source close to the Ukrainian government said. The United States is sending Zelensky $1.5 billion monthly to help offset the economic impact, in addition to military weaponry, the source added.

“Taxpayers are giving billions of dollars to support Ukraine. Why is it that the desire for the lenders to have upside is greater than their desire to save the world from a calamity?” the source said.

The lending group, meanwhile, is willing to delay the upcoming interest payment to keep the beleaguered country out of bankruptcy. But some creditors still object to Ukraine’s request to settle the debt in the next few years, a source close to the lenders said.

“We are willing to defer the money, but that doesn’t mean they should have the right to re-cut the deal,” the source said.

Ukraine agreed to the unusual $3 billion loan, which carries no principal, when it was on the edge of bankruptcy in 2015. The terms would allow the lenders — beginning in 2025 — to collect 40% of the country’s gross domestic product annually if it exceeded $125 billion and was growing at more than 4% per year.

JPMorgan in 2021 estimated the value of the bonds could wind up being around $8 billion, but that was before Vladimir Putin’s forces attacked the country and devastated trade. Ukraine’s GDP has fallen to around $100 billion, according to the International Monetary Fund, after having reached $200 billion last year, its highest ever.

Ukraine wants to pay off the bonds by 2027.