Fixed Income

July 20, 2020

Ukrainian sovereign Eurobonds came under heavy selling pressure for the second week in a row amid concerns that the country could get kicked out of its IMF program once again amid rising populist rhetoric in the government. In political developments, Parliament set Oct 25 as the date for municipal elections nationwide. Elections will be held in district and village councils, as well as elections to provincial councils and the elections of town and city mayors. The longest outstanding Ukraine-32s Eurobond issue tumbled by 4.7% to 95.7/96.7 (8.0%/7.8%) and medium-term Ukraine-25s lost 1.3% to close at 99.9/100.9 (7.9%/7.7%). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) slumped by 4.1% to 88.0/89.5 cents on the dollar.