Fixed Income
Quotes for Ukraine’s sovereign and corporate Eurobonds rallied last week after the country received its first IMF cash in more than 3 years in the form a USD 3.2bn credit tranche. Investors hoping for a de-escalation of the standoff in Donetsk oblast were able to take some solace from a softening of rhetoric from Russian President Putin, who for the first time backed Ukraine’s May 25 presidential election and called on pro-Russian separatists to delay a planned secession referendum. Nevertheless, there were few positive signals coming out of Kyiv, where the interim Batkivschyna-led government made increasingly bellicose statements regarding its intent to continue so-called “anti-terrorist operations” in Donetsk and Lugansk cities aimed at regaining control over government buildings. Despite a correction on Friday, the benchmark long-term Ukraine-2023 issue still advanced by 2.7% for the week to close at 84.4/85.6 (10.2%/10.0%).
