Fixed Income
It was a dramatic week for the Ukrainian Eurobond universe, with quotes for benchmark sovereign issues plunging to new historical lows as nervous investors sold their positions rather than risk being caught out by a possible collapse of the ceasefire agreement reached in Minsk on Feb 12, although chances for a period of calm appeared to improve after President Poroshenko announced a retreat of government forces from the besieged town of Debaltsevo. Sovereign prices fell across the curve on Wednesday (Feb 18) to trade under 50 cents on the dollar, which could be an indication of the heavy writedowns that investors are expecting to take on the bonds as a result of restructuring. However, no one seems to be quite sure about what sort of restructuring Ukraine will ask its creditors for as part of the new IMF “extended fund facility” deal.
