Fixed Income
Ukraine’s 9 newly-issued sovereign Eurobonds, which replaced the previously outstanding 13 issues as part of the country’s debt operation, began trading with higher-than-expected yields near 9% at the end of last week. All the new bonds have a unified 7.75% coupon. The curve looks to be slightly inverted, with long-term and medium-term issues initially pricing at roughly the same yield. The longest new outstanding issue, Ukraine-27s, currently have quotes at 91.5/92.5 (9.0%/8.8%), and Ukraine-19s, which are directly-exchanged version of Ukraine-15s, have quotes at 95.0/96.0 (9.3%/9.0%). The initial pricing below par is a mis-match of the quotes for the old 2015 issue, which was quoted slightly above par and suggested a yield of less than 7.75%. Nevertheless, we will not be surprised to observe an improvement in the bids for Ukraine-19s in the coming weeks.
