Fixed Income
Yields for long-term Ukrainian sovereign Eurobonds surged to historical highs during the last week of 2014 but then recovered some ground in the first trading week of the new year. Volatility has appeared in the papers amid heavy speculation about whether the country is going to receive additional financial support from the IMF and whether Moscow might call in its option to demand immediate repayment by Kyiv of an outstanding USD 3.0bn loan. The political will in regard to Ukraine’s implementation of structural reforms still looks questionable, and there is obvious pessimism among investors about whether a quick economic rebound will take place in the country in 2015. Also, without a formal peace agreement in place to end the war the Donbass region of Eastern Ukraine, there is the danger that hostilities could re-start between pro-Ukrainian and pro-Russian military forces. The IMF currently has a mission in Kyiv to discuss the next round of the standby program, but a concrete decision
