Fixed Income
Ukrainian sovereigns were lower to start the month of July, a week after rebounding strongly to snap their June losing streak, as investor selling of high-yield national issues resumed. The threat of reduced central bank stimulus and higher interest rates has hit emerging markets considerably harder than other asset classes over the past two months. Ukraine’s benchmark 10-year Eurobonds lost 4.1%, closing at 84.6/85.8 (10.0%/9.8%). Medium term Ukraine-17s fell 3.0%, ending at 89.0/90.0 (9.9%/9.6%), while quasi-sovereign NaftoGaz-14s were unchanged at 99.3/100.3 (10.1%/9.2%). In the corporate universe, quotes also retreated, with DTEK-18s falling 1.5% to 92.2/93.4 (10.0%/9.7%). Agroton-14s, one of Ukraine’s most distressed corporate issues, dropped 8.8% to 55.3/67.3 (87.9%/60.3%) ahead of a USD 3.1mn coupon payment due on the bond next week.
