Fixed Income
Ukrainian sovereign Eurobonds finished mixed last week, as little new information appeared regarding results of talks between the Finance Ministry and the main creditors’ committee holding some USD 8.9bn of the country’s Eurobonds. However, an unsourced report appeared in the Financial Times on Monday (Aug 24, a holiday in Ukraine but a business day in the West) that the creditors are prepared to make a deal with a 20% writedown on the principal of the sovereigns. Any agreement reached with the creditor committee will need to be presented to other bondholders with around three weeks’ notice for voting on the proposed new terms. The Franklin Templeton-led creditor committee owns only about 25% of the USD 500mn sovereign maturing on Sept 23, according to data from Bloomberg. Quotes for this issue rose 1.9% last week to close at 60.5/62.0 cents on the dollar. Benchmark Ukraine-23s declined by 3.9% to close at 55.5/56.5 (18.7%/18.3%) and Ukraine-17s shed 1.5% to 54.0/58.0.
