Fixed Income

March 23, 2018

Ukraine’s sovereign Eurobonds saw a decrease in quotes after the World Bank expressed concern that the macroeconomic situation in Ukraine remains unstable amid growing vulnerability of the government’s financial position. The World Bank warned that Kyiv could face difficulties to find a source to finance external debt payments, the peak for which will be at the end of this year and early 2019. News last week that the OSCE Special Monitoring Mission noted a significant improvement in the security situation in the Donbass was overshadowed by charges from the General Prosecutor’s office against former celebrity prisoner of war Nadya Savchenko, now an MP, of planning to violently overthrow the government. Savchenko cannot be arrested, however, as she enjoys parliamentary immunity from prosecution. The longest outstanding Ukrainian Eurobonds, Ukraine-32s, declined by 0.9% to 95.7/96.5 (7.9%/7.8%), and quotes for medium-term Ukraine-23s shed 0.5% to 103.7/104.4 (6.9%/6.8%). The VRI derivati