Fixed Income
The Ukrainian Eurobond universe showed only a moderately positive reaction to the new IMF loan program of USD 17.5bn for Kyiv announced last week, as it was understood that the overall Western bailout for Ukraine, estimated by IMF head Christine Lagarde at USD 40bn, will have to include some concessions from bondholders. Finance Minister Natalia Jaresko said she hopes that talks with all holders of Ukrainian sovereign debt will start in early March, and that only after consultations will MinFin be in a position to state how much restructuring can be accomplished. A possible prolongation of Ukrainian sovereign and quasi-sovereign Eurobonds has been on the table for the last couple of months, and a scenario of so called ‘soft restructuring’ has been already priced in. The bond market also had a moderate reaction to the result of Thursday’s (Feb 12) “Minsk 2” peace summit, which set out a difficult-looking roadmap aimed at ending the 10-month war between Kyiv and pro-Moscow rebels; Ukrain
