Fixed Income

March 13, 2018

Ukraine’s sovereign Eurobonds were little changed last week after initial worries that the latest natural gas disagreement between Kyiv and Moscow could lead to serious problems faded away with the end of freezing weather. An early March cold snap, the harshest of this year’s winter in Ukraine, led Russia’s Gazprom to threaten Ukraine that it would terminate its gas contracts due to unauthorized fuel siphoning. Any such move by Gazprom would also negatively affect gas flows to Europe. The issue of Kyiv’s access to extra supplies during winter cold snaps is the source of a long-running dispute that prompted Russia to suspend gas exports to Europe through Ukraine twice already, during the winters of 2005-06 and 2008-09. An encouraging piece of business news was the successful auction for 4G licenses in the 1800 MHz band. The country’s three largest mobile operators acquired the licenses from the state for a total sum of UAH 5.4bn (USD 200mn); this should lead to a marked improvement in U