Fixed Income
Ukrainian sovereigns ended lower for a second consecutive week, with benchmark Ukraine-23s declining by 1.5% to 86.8/87.8 (9.7%/9.5%). Investors were disappointed by poor GDP figures released by UkrStat which registered a 1.5% year-on-year contraction in the country’s economy in 3Q13. Further, Standard & Poor’s cut the nation’s long-term credit rating by one notch to B- with a negative outlook on Friday (Nov 1), emphasizing concerns about the government’s high external financing needs. The downgrade comes on the heels of Moody’s even worse assessment of the sovereign, at Caa1, made in September. Short-term Ukraine-14s, which are due in April, lost 0.9% to close at 96.0/97.0 (15.4%/13.5%). Quasi-sovereign Naftogaz-14s due in September lost 1.7% to end at 94.3/95.3 (16.6%/15.3%). Quotes for corporate issues followed the sovereigns, with DTEK-18s decreasing by 1.1% to 89.9/90.7 (10.8%/10.5%) and Metinvest-18s slipping 1.4% to 90.3/91.9 (11.7%/11.2%). Ferrexpo-16s looked somewhat better,
