Fixed Income
Ukraine’s long-term benchmark sovereign bond issue was hit by more selling last week, as investors showed no interest in the paper amid uncertainty about how the government intends to restructure Ukraine’s debt. Rumors were circulating that the Finance Ministry expects to net around USD 15bn via a debt restructuring of the country’s outstanding public and guaranteed debt, which totaled USD 69.8bn as of 1 Jan 2015. Meanwhile, there was relatively good news from the Donbass as it appeared that the Feb 12 “Minsk 2” ceasefire agreement was finally starting to be implemented, including the important step of artillery withdrawal. Ukraine’s longest outstanding Eurobonds, due in 2023, slid 4.4% to close at 42.5/43.5 (23.8%/23.3%), while sovereigns due this September traded at 49 cents on the dollar, down from 54 cents a week ago. Not all issues were down, however; medium-term Ukraine-20s climbed 1.8% to 41.3/43.3 (30.2%/28.8%).
