Fixed Income
Quotes for Ukrainian sovereign Eurobonds were broadly higher last week, with the longest outstanding issue, Ukraine-23s, advancing by 9.6% to close at 45.0/46.0 (22.7%/22.2%). News that Finance Minister Natalia Jaresko rejected a maturity extension offer from a group of Ukraine’s private creditors led by Franklin Templeton on the grounds that it would provide insufficient debt relief, came too late on Friday (Apr 17) to affect trading. The main intrigue at the moment is whether quasi-sovereign USD 750mn UkrEximBank-15s coming due on Apr 27 will be repaid in full and on time, or whether bondholders will agree to a 3-month delay. In our view, investors were somewhat encouraged by Jaresko’s statement that restructuring of USD 3.0bn of Ukraine’s Eurobonds held by Russia falls under the mechanisms of the “London Club”. This means that the Russian-owned bonds are classified as commercial paper, not as bilateral sovereign debt. The former classification makes it more difficult for Russia to e
