Fixed Income

June 27, 2017

The yields on outstanding Ukrainian long-term sovereigns were little-changed last week amid a hot period for emerging market sovereign debt, as Russia, Belarus and Argentina all issued new USD-denominated bonds. Domestic political turmoil in the US associated with new President Trump is notably not spilling over into the financial markets, which have been looking quite sturdy so far this year. Russia tapped the market with 10-year and 30-year bonds offering impressively low 4.25% and 5.2% coupons respectively, raising USD 3.0bn. Belarus managed to attract USD 1.4bn in 5-year and 10-year issues with yields of 7.125% and 7.625% respectively, and serial defaulter Argentina was successful in placing USD 2.75bn at only 7.90%. All the issues confirmed the latest sign of investor hunger for yield in an environment where developed-country sovereigns are returning next to nothing. We expect Ukraine to be the next country to step onto the international Eurobond stage in order to help finance a f