Fixed Income
Quotes for Ukraine’s sovereign Eurobonds declined last week, with long-term benchmark Ukraine-25s falling by 2.2% to 88.3/89.5 (9.6%/9.5%) following a pair of publicized confrontations between members of the respective teams of President Poroshenko and Prime Minister Yatseniuk. Poroshenko and Yatseniuk lead the two main coalition parties and are publicly trying to show the same vision for the country’s development. Yields increased to the highest levels since the sovereigns were re-issued in mid-November, and the tension showed at the end of the week on Friday (Dec 18), when Parliament failed to approve a budget bill needed to resume the country’s IMF funding. There was also an external negative factor in play, as the Federal Reserve decision to raise interest rates delivered a hit to emerging market bonds.
