Fixed Income
Ukraine’s sovereign Eurobonds regained some ground last week to snap a month-long losing streak, after French President Hollande and German Chancellor Merkel made a surprise trip to Moscow to try to find a diplomatic solution to the conflict in Eastern Ukraine. The leaders also visited Kyiv for talks on the crisis. Positive comments also came from US Secretary of State John Kerry, who said after a meeting with President Poroshenko on Thursday (Feb 5) that he believes the approval of new IMF financial support for Ukraine is imminent. Still, the rebound in the sovereigns was hardly enthusiastic, given the widespread belief that neither Kyiv nor Moscow will change their positions on the Donbass situation enough to allow a lasting peace deal to be reached. The benchmark Ukraine-2023 Eurobonds added 5.4% to close at 52.5/54.0 (19.2%/18.7%) while medium-term Ukraine-20s were essentially unchanged at 51.8/53.8 (23.7%/22.7%).
