Fixed Income

October 15, 2019

Quotes for Ukrainian sovereign Eurobonds ended higher last week, reflecting a downward move in major bond yields. In particular, short-dated US Treasury yields fell after Federal Reserve Chairman Jerome Powell announced that US central bank intends to increase the size of its balance sheet by purchasing additional treasuries. Ukraine’s sovereign Eurobonds with maturity in 2028, which are viewed as benchmark 10-year debt papers, rose firmly by 2.0% to close at 112.0/112.7 (8.0%/7.9%), and the medium-term benchmark Ukraine-24s added by 0.5% to 108.4/109.2 (6.8%/6.6%). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) declined by 0.9% to 91.6/92.6 cents on the dollar, as they were hit by information that the agricultural land reform which has been expected to boost economic growth could be delayed again or conducted only in a limited form.