Fixed Income
Ukraine’s dead-rubber sovereign Eurobonds edged higher last week, as the Finance Ministry announced that holders will receive new restructured issues on Nov 12. The so-called Russian bond in the amount of USD 3bn is the only series which has not seen a restructuring approval. We see a high probability that Kyiv will default on this bond in December, and that the issue will end up in litigation in British court. The Wall Street Journal wrote that the IMF plans to change its lending policy so that it can move ahead with Ukraine’s loan facility even if Kyiv defaults on the Russian loan. Among outstanding Ukrainian bonds, which will be proportionally exchanged for 9 new issues with maturity in 2019-2027, Ukraine-23s gained 1.7% to close at 79.5/81.5 cents on the dollar and Ukraine-17s added 0.8% to 79.0/80.0. Ukraine-15s, which will be directly exchanged for a new issue with maturity in 2019, were unchanged at 82.0/83.5.
