Fixed Income
Ukraine’s sovereign Eurobonds suffered one of their worst weeks of the past 5 years amid growing investor expectations that the country is headed for some type of default given its precarious macroeconomic situation. The longest outstanding issue, Ukraine-23s, plummeted 6.8% to a new all-time high yield of 72.5/74.5 (13.0/12.5%), as word spread that the latest technical mission from the IMF had left Kyiv on Tuesday (Nov 25) without indicating any promise of a quick disbursement of the next loan tranche. The mission will return before the year-end, but it already looks clear that keeping the IMF program on track is not going to be a smooth process. Among negative macroeconomic news from last week, the NBU reported that Ukraine’s balance of payment deficit for October alone was a whopping USD 3.5bn as a result of debt redemptions to Russia’s Gazprom.
