Fixed Income
Ukraine’s sovereign Eurobonds got hammered across the board last week amid a sharp escalation in political unrest in Kyiv, which also began to spread to some provincial cities. The benchmark Ukraine-23 long-term issue lost a whopping 5.7% to 88.3/90.3 (9.4%/9.1%). The drop was entirely Ukraine-specific, as the global rally in emerging market bonds continued (up until a selloff on Friday), with Turkey able to issue a new USD 2.5bn, 10-year bond at 5.85%, representing a spread of around 300 bps over US Treasury yields. Ukraine is currently locked out of the international bond market and is relying, at least for the moment, on a promised Russian USD 15bn bailout to cover its short term financial needs. The Finance Ministry said it plans to sell a further USD 2.0bn in government bonds to Russia this month at a 5% yield. Medium term Ukraine-17s tumbled by 6.5% to close at 90.3/92.3 (9.9%/9.2%), while short-term papers with maturity in June suffered considerably less, declining by 1.4% to 99
