This deal, once finalized, will help Ukraine save billions and allocate crucial funds for its military, which has been severely impacted by the ongoing conflict.

Under the terms of the agreement, the creditors have agreed to write off more than a third of the nominal value of the government bonds they hold. This debt restructuring move is expected to enable Ukraine to save approximately $11.4 billion in the next three years, providing much-needed financial relief. The International Monetary Fund (IMF), whose financial assistance to Ukraine depends on the country's ability to reduce its debt, has granted its approval for this deal.

Denys Shmyhal, Ukraine's prime minister, expressed his satisfaction with the preliminary agreement, stating that it would free up resources for defense, social spending, and reconstruction efforts. The deal, which has been signed with the largest group of creditors representing about a quarter of private bondholders, requires approval from two-thirds of all bondholders in order for it to come into effect.

Olena Bilan, the chief economist at Kyiv-based investment firm Dragon Capital, remains optimistic about the approval of the agreement. She noted that there are high chances of bondholders accepting the terms due to various incentives, such as additional fees, offered in return.

This debt restructuring deal comes at a crucial time for Ukraine, as an agreement to suspend debt payments was set to expire on August 1st. Preserving funds for the country's limited state budget is vital not only for economic stability but also for financing essential military operations.

Ukraine's efforts to reduce its debt burden have been met with support from international creditors and financial institutions. The deal strikes a balance between addressing the country's debt crisis and ensuring it has the necessary resources to rebuild and support its armed forces.

The finalization of this debt restructuring agreement will provide much-needed economic relief to Ukraine, paving the way for stability and the allocation of funds to important areas such as defense, social spending, and reconstruction efforts.