Fixed Income
Quotes for Ukrainian sovereign Eurobonds corrected last week after a firm rally at the end of July on positive expectations about the latest IMF loan disbursement of USD 1.7bn to the government. Debt restructuring talks between the Finance Ministry and a Western creditor group have continued to drag on, but a new round of high-level negotiations are planned for tomorrow (Aug 12) at the suburban San Francisco headquarters of investment house Franklin Templeton, the largest holder of Ukrainian sovereign Eurobonds. We do not rule out that US government representatives might participate in these negotiations in an effort to increase their probability of success. We believe that the US and Ukraine are intent on forcing the creditors to accept a principal writedown of between 20 and 30 percent on their holdings.
