Fixed Income

June 08, 2015

Quotes for Ukrainian sovereign Eurobonds advanced last week, reflecting a generally positive IMF staff statement after the first review under the USD 17.5bn bailout program for the country. Although the IMF mission reduced its Ukraine growth projections for 2015 to -9% and projects full-year inflation of 46%, we see a high chance the IMF’s Executive Board will approve the next bailout tranche of USD 1.7bn to Ukraine later this month despite the lack of a restructuring deal with Kyiv’s sovereign creditors. The longest outstanding Ukrainian Eurobonds with maturity in 2023 rose by 4.0% to close at 55.0/56.3 (18.6%/18.2%). Medium-term Ukraine-17s added 3.4% to 49.5/50.5 (50.6%/49.3%) and the USD 500mn bonds maturing in September, which are on the front line of any restructuring deal, increased by 5.8% to close at 53.5/54.4.