Fixed Income

May 18, 2015

Ukrainian sovereign Eurobonds ended mixed last week after the Finance Ministry and a creditor group led by Franklin Templeton accused each other of stalling negotiations for the IMF-required sovereign debt restructuring. The open clash of opinions probably did not improve the chances of an agreement before the IMF completes a periodic review of Ukraine’s implementation of lending conditions by June 15, leaving open the possibility that uncertainty over the country’s debt could continue at least through the end of the summer. The longest outstanding sovereign issue, Ukraine-23s, declined by 2.0% to close at 48.0/50.0 (21.4%/20.5%), while the sovereign’s USD 2.6bn bonds maturing in July 2017 rose by 2.4% to 47.3/48.0 (52.6%/51.6%). Bonds maturing in September, which are on the front line of any restructuring deal, edged down by 1.0%, finishing at bid/ask of 51.5/52.5 cents on the dollar.