Fixed Income
Quotes for Ukrainian sovereign Eurobonds ended lower last week, although only moderately so, as issues recovered most of their initial losses after the government’s Tuesday (May 19) announcement of a possible moratorium on debt servicing. Kyiv forced investors to weigh the risk of refusing to accept debt writedowns by passing a bill enabling the government to halt repayments if it is unable to reach agreement with bondholders by its June 15 target, paradoxically increasing the chances that a deal may get done. Ukraine is acting to meet the demands of the IMF on reducing its debt load in order to qualify for the next tranche of its USD 17.5bn bailout loan. Meanwhile, signs of a more constructive tone appeared when the main creditor group led by Franklin Templeton disclosed the names of its three other members following accusations of a lack of transparency from Kyiv. Templeton, BTG Pactual Europe, TCW Investment Management, and T. Rowe Price Associates own a combined USD 8.9bn of Ukrain
