Fixed Income
Quotes for Ukrainian sovereign Eurobonds had a calm trading week. Prices demonstrated only small increase amid further de-escalation of conflict in Donbass and NATO Secretary General assurance that the Alliance will not stop supporting Ukraine. Meanwhile, Russia and the European Commission have agreed to a trilateral meeting with Ukraine on gas with the key issue of the meeting will be gas transit in the winter season. Ukrainian Naftogaz backs the proposal to organize the meeting in Brussels. The shortest outstanding sovereign issue, Ukraine-2019s, inched up 0.1% to 97.8/98.5 (8.7%/8.3%) and 10-year debt papers, Ukraine-26s, rose 0.3% to 91.5/92.5 (9.1%/8.9%). The country’s Finance Minister Alexander Danyluk once again confirmed the government’s intention to issue new Eurobonds in 2017 but when investors will be ready to accept a yield near 6%. The generally more volatile VRI derivatives (linked to Ukraine’s future GDP performance) were flat at 30.4/31.4 cents on the dollar.
