Fixed Income
Ukrainian sovereign Eurobonds finished mixed last week, as another week passed without any signs of a sovereign restructuring deal with bondholders. Reports began to emerge that the early-June deadline set by the IMF for an agreement is not firm, and that the process could drag on until mid-September when USD 500mn Ukraine-15s are due for redemption. Some market players are even starting to believe that the IMF will continue to fund Kyiv even if the debt-restructuring targets are not met, which creates a disincentive for bondholders to agree to any principal writedown. The three targets mandated by the IMF under the extended fund facility are: 1) to achieve USD 15.3bn of savings over four years; 2) to bring the ratio of public debt to GDP below 71% by 2020; and 3) to keep the national budget’s gross financing needs at an average of 10% of GDP in the 2019-25 period. The above-mentioned sovereigns maturing in September, which still look likely to be restructured, jumped by 15% in April,
