(Bloomberg) -- Some holders of Ukraine’s debt are in talks to form a creditor committee ahead of a potential debt restructuring, according to people with direct knowledge of the matter.

Large bondholders may accelerate talks to form such a group after the International Monetary Fund’s spring meetings, scheduled to start on April 17, the people said, asking not to be named because the discussions are private. They said time pressure is intensifying as a freeze on bond repayments granted to Ukraine in 2022 is scheduled to end in September. 

Payments on the country’s $20 billion of outstanding international bonds were halted two years ago, following Russia’s invasion, upon an agreement with bondholders. But policymakers in Kyiv are struggling to keep the country’s finances in order as the invasion enters its third year, with Russian troops having destroyed cities, damaged energy infrastructure, and killed tens of thousands while displacing more than 10 million. 

Ukraine’s government is also battling uncertainty over international aid, with more than $60 billion in military and financial assistance bogged down in Washington. Of that, Kyiv had hoped to receive $8 billion in direct budget support.

Despite those pressures, Ukraine’s government has been trying to remain on good terms with global investors, in part because it hopes to rely on them to help fund the country’s reconstruction when the war ends.

Ukraine’s gross domestic product expanded 5.3% last year, with the IMF saying the economy showed “remarkable resilience,” while also warning of headwinds this year that it said would lead to growth slowing to 3%-4%. Ukraine’s GDP-linked bonds, whose payments are contingent on economic growth, traded at 55.35 per dollar on Monday, near their highest since Russia’s invasion began.

Ukraine’s debt chief Yuriy Butsa said in January that more data points were needed in coming months to serve as the basis for discussions with eurobond holders. He said Ukraine hoped to reach a deal by September.

The country’s dollar notes due in 2041, the longest maturity, extended their decline to for a sixth day to trade below 55 cents, while sinkers due in 2034 are trading slightly higher at more than 28 cents on Monday.

--With assistance from Nishant Kumar.

(Updates with bond performance in the last paragraph.)

©2024 Bloomberg L.P.