Fixed Income
Ukrainian sovereign Eurobonds were lower across the board last week as escalating military clashes in the east of the country culminated with the shooting down of a civilian Malaysian Airlines jet carrying 298 people. President Petro Poroshenko responded by stating that the Donbass war has now overspilled the territory of Ukraine, calling the tragedy an international terrorist attack by pro-Russian paramilitaries. The move by Standard&Poor’s to upgrade the outlook for Ukraine’s CCC credit rating from negative to stable did little to encourage investors to buy the country’s debt. The longest outstanding issue, Ukraine-23s, dropped by 1.9% to close at 93.3/94.3 (8.6%/8.4%), and medium term Ukraine-17s slid 2.3% to 94.0/95.0 (8.9%/8.5%). Quasi-sovereign Naftogaz-14s coming due in September decreased by 0.5% to end at 97.7/98.4 (21.8%/17.8%).
