Fixed Income

May 23, 2017

Ukrainian sovereign Eurobonds remained on the rise last week as the final granting of a visa-free regime for Ukrainian citizens by the European Union is likely to provide an immediate boost to the domestic economy. The deal comes after 7 years of negotiations on the steps needed from Kyiv. Starting in mid-June, Ukrainians with biometric passports will be able to enter EU countries without visas for up to 90 days within any 180-month period. In other news, the latest IMF delegation started working in Kyiv on May 16 on the fourth review of the USD 17.3bn loan program; approval would lead to a large disbursement of USD 1.9bn in July. In an optimistic scenario, Kyiv could also receive two additional tranches of USD 1.28bn each before the end of the year, if it passes subsequent reviews. The current 2018 IMF schedule contains four disbursements of USD 955mn each (USD 3.82bn total). The country’s longest outstanding Eurobond issue, Ukraine-27s, rose 1.0% to 96.8/97.4 (8.2%/8.1%) while Ukr