Fixed Income

June 02, 2015

Ukrainian sovereign Eurobonds rose last week thanks to improved sentiments after the country sold USD 1.0bn US-backed bonds. Meanwhile, Ukrainian Finance Minister Natalia Jaresko said that part of bondholders understood that a principal cut was going to be a necessity. Ukraine’s total public debt amounted to USD 67.3bn as of 1 May 2015 with USD 17.2bn or 25% of the debt representing by sovereign Eurobonds. Talks with creditors over a USD 23bn debt restructuring also includes sovereign guaranteed bonds and bonds of state-owned UkrEximBank, OschadBank as well as bonds of Ukrainian Railways. The country’s current debt-to-GDP ratio stands at 77% compared with 38% two year ago. Long-term benchmark Ukraine-23s advanced by 3.6% to 50.0/51.3 (20.6%/20.1%) and bonds maturing in September, which are on the front line of any restructuring deal, added 1.0%, finishing at bid/ask of 50.3/52.0 cents on the dollar.