Fixed Income
Ukraine’s sovereign Eurobonds sold off late last week after the IMF’s decision to extend its mission in Kyiv beyond the planned departure date of Jan. 29. This move added to uncertanty regarding the timing and conditions of an expected USD 30bn multi-year loan facility for the country that appears to be in the works. Among other news impacting the Ukrainian bond universe, the Finance Ministry has hired investment bank Lazard to assist in negotiations with foreign creditors in regard to restructuring Ukraine’s Eurobond debt due to the deteriorating sovereign financial situation. At this point, we are of the view that the restructuring will be “soft”, meaning an offer to bondholders to exchange existing bonds with maturity in 2015-2018 for new longer maturity issues without a principal haircut.
