Fixed Income

October 21, 2019

Quotes for Ukrainian sovereign and corporate Eurobonds were mixed last week despite a clearly positive development in the closely watched court case of the country’s largest bank. PrivatBank, which became 100% state-owned in 2016, won an appeal in a London court on Oct 15 that allows the lender to pursue claims worth billions of dollars against its former owners. The London court concluded PrivatBank had a “good arguable case” to recover USD 1.9bn. PrivatBank was nationalized three years ago when the Ukrainian government injected the equivalent of USD 5.5bn into the troubled institution to keep it afloat. Much of the hole in the balance sheet allegedly stemmed from fraudulent and related-party lending. In other news, the World Bank raised its forecast for 2020 Ukrainian GDP growth from 3.0% to 3.7%. However, the new projections from the reputable financial institution are still substantially below what Prime Minister Oleksiy Honcharuk has announced as the goal of achieving 40% GDP grow