EAVEX Weekly

December 18, 2017
 

Ukrainian sovereign Eurobonds were mostly inactive last week. Overall sentiments on emerging markets remained positive, as the average yield spread of EM dollar debt over US Treasuries narrowed to 287bps from 291 bps, according to data from Reuters. In Ukraine-specific developments, there was a statement from the IMF that the Fund does not plan to send its monitoring mission to Kyiv for the fourth review of the USD 17.5bn support program, as Ukraine has not complied with program requirements. This means that the country could face a lack of inflow in its financial account of balance of payments next year to cover the likely current account deficit. The benchmark Ukraine-27s bonds rose by 0.6% to close at 103.5/104.0 (7.2%/7.2%) and the medium-term 2023 sovereigns were also up by 0.4% to 106.4/107.4 (6.4%/6.2%). The more volatile VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) edged down 0.2% to 54.5/55.0 cents on the dollar.