(Bloomberg) -- Ukraine’s hard-currency bonds extended losses after a brief spike triggered by the approval of a $61 billion aid package by the US House of Representatives. Positive sentiment eroded as bondholders face tough talks with the war-turn nation about another debt restructuring.

The country’s debt posted the best performance among emerging-markets dollar bonds when trading resumed on Monday, before turning sharply lower. A bond due September 2034 traded at 25.9 cents on the dollar as of 2:44 p.m. in London, a sixth consecutive day of losses and the lowest level since February.

“There hasn’t been any meaningful buying flow” into Ukraine bonds following the US vote over the weekend, said Viktor Szabo, investment director for emerging markets debt at Abrdn Plc. Meanwhile, “upcoming restructuring talks are adding a layer of complexity,” he said. 

On Saturday, the US House passed fresh aid for Ukraine, ending a six-month political impasse in Washington during which Kyiv’s stockpiles dwindled as Russia intensified its war efforts. The legislation is set to make it to President Joe Biden this week after the Senate takes up the package, with delivery of actual weapons due to shortly afterwards. 

The promise of further assistance had boosted optimism, though Ukraine faces difficult talks with bondholders ahead of the expiry of a two-year halt in payments which it negotiated after Russia’s invasion in 2022.  

Read more: US Aid Gives Kyiv Respite But Battlefield Shift Remains Far Off

Earlier this month, a group of Ukrainian debt holders chose PJT Partners Inc. as a financial adviser ahead of a potential restructuring, Bloomberg reported. Payments on the sovereign’s $20 billion of outstanding international bonds were suspended to help the country’s war effort.

The aid package “is clearly positive for Ukraine,” said Timothy Ash, strategist at RBC Bluebay Asset Management. “It will prop up its defenses and I think came as a surprise to Moscow, so will put Russia back on the back foot.” 

--With assistance from Volodymyr Verbianyi.

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