Volodymyr Zelensky

Mandatory Credit: Photo by SERGEY DOLZHENKO/EPA-EFE/Shutterstock (10491402a)

Even the Good News Is Bad for Ukraine’s President Zelenskiy

Ukraine President Volodymyr Zelenskiy is battling Russian-backed rebels in the east. He’s trying to zigzag around Donald Trump’s impeachment drama. Even what should pass for good news, the country’s flourishing economy, has a catch: The stronger Ukraine’s economic growth, the more an obscure debt derivative could punch a hole in its finances.

The source of that trouble is a financial instrument that Ukraine granted in 2015 as it teetered on default. To compensate creditors who agreed to write off part of the country’s debt, the government granted so-called GDP warrants that promise future payoffs tied to the country’s annual gross domestic product growth. 

Source: Bloomberg Businessweek