Fixed Income

August 25, 2020

Quotes for Ukrainian sovereign Eurobonds were higher last week ahead of the country’s 29th Independence Day on Monday (Aug 24). In the 18th century, the Ukrainian people lost their statehood and found themselves caught between the Russian and Austrian Empires for the next two hundred years. Meanwhile, in developments related to the Donbass conflict zone, there was news that a meeting of the foreign ministers from Ukraine, Germany, France, and Russia may be held in September to discuss holding elections in Donbass, which Kyiv has made conditional on regaining control of the pre-2014 Ukrainian-Russian border. The Ukraine Eurobonds with maturity in 2032 grew in value by 1.6% to close at 101.5 (7.2% YTM) and medium-term Ukraine-25s increased by 0.7% to 106.2 (6.4% YTM). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) surged by 10% to 95.0 cents on the dollar having in reaction to the news late in the preceding week that MinFin had bought back 10% of the