To make that clear, Kyiv even engaged in a tiny bit of hardball before the final deal was struck, passing a law on 18 July that authorised the suspension of foreign debt repayments. That would not have stopped any such default from being a formal one, but in reality the costs to Ukraine of defaulting in the current circumstances would have been minimal. European leaders are working on finalising a new “loan” based on the proceeds earned by frozen Russian funds to enable the transfer of $50 billion to Kyiv by the end of the year.

Roughly $2.5 billion in such proceeds is separately being transferred for the benefit of Kyiv — in the form of arms purchases and a Belgian support fund — by the end of the month, according to Euroclear. And Ukraine’s intergovernmental creditors are unlikely to have been concerned about a formal default, having agreed to delay their own debt repayments through 2027.

The deal even includes potential upsides for Ukraine’s Eurobond holders if the country’s economy is able to exceed IMF forecasts by 2028. While this is all but impossible — the IMF forecasts are extremely generous at best, misleading at worst — the haircut would fall to 25%.

The only major concession to which bondholders would agree if the deal is finalised is that Ukraine’s GDP warrants — sweetener instruments agreed to as part of the country’s 2015 restructuring — would no longer have “cross defaults” to national bonds, leaving Kyiv free to default on them without triggering another sovereign bankruptcy.

Overall, the restructuring buys Kyiv significant time, as Ukraine would only have to repay $200 million next year and around $500 million in 2026. In the event that Western politics take a turn and Ukraine is left without US support, however, bondholders will have to take much larger losses thereafter. A restructuring that buys bondholders time, and aligns their interests with Ukraine’s through the coming years, is certainly a win from Kyiv’s point of view.