Fixed Income
Ukrainian sovereigns ended mixed last week, pausing their recent rally due to suspense over a USD 120mn Eurobond coupon due on Friday (Jul 24), which was ultimately paid by the Finance Ministry on time. We hope that the move to pay the coupon was a sign that MinFin feels that it is making progress in the tough talks with hard-line creditors, and was not simply a case of kicking the can down the road until the next redemption (USD 500mn is due on Sept 23). The high-stakes poker game between Ukraine and its creditors is bound to continue until the moment when a bond exchange accord is finally signed. Before the two sides entered confidential negotiations this month, Ukraine was asking for a 40% principal write-down. The 4-member creditor group owning USD 8.9bn of the nation’s debt insists that the imposition of such bondholder losses is not needed to comply with the terms of the IMF rescue loan. The IMF has stipulated that Ukraine should, among other targets, produce a plan to cut its d
