Ukraine has hired investment bank Lazard to assist in negotiations with foreign creditors over restructuring as much as $20 billion of eurobond debt, The Wall Street Journal has reported, referring to its sources.

The government in Kyiv is likely to seek to lengthen maturities and reduce interest rates on existing bonds but not reduce the principal amount in an effort to make the deal more palatable to creditors.

A $3 billion eurobond issued to Russia in 2013 before the new pro-western Ukrainian government took power isn’t expected to be included in the talks, these people said, but will be paid in full at maturity in December.

The restructuring comes as Kyiv is negotiating with official lenders in the U.S. and Europe for as much as $20 billion of additional funding to help keep its budget afloat. The eurobond restructuring is likely to be a condition of a loan deal now being completed with the International Monetary Fund, one person close to the situation said.

Talks with bondholders haven’t yet begun and a creditors' committee is still to be formed, the newspaper said.

Ukraine has about $18 billion of sovereign eurobonds—including the $3 billion owed to Russia—and another $4 billion in quasi-sovereign eurobonds.

"We think a viable restructuring plan could be one where all bondholders have their maturity extended by seven years and receive a constant coupon of 5% on bonds nominated in dollars and 4% for bonds in euro without any principal haircut," said Nomura analysts.