Fixed Income

December 17, 2018

Ukrainian sovereign Eurobonds ended somewhat lower last week after European Council President Donald Tusk blamed Russia for ‘zero progress’ in implementation of the Minsk peace accord in Ukraine. The EU-brokered Minsk peace agreement, signed by Moscow and Kyiv, was first reached in late 2014 and then re-worked in early 2015, but its political statutes have never been implemented with the exception of cease-fire provisions. News that the European Commission has disbursed an initial installment of macrofinancial assistance to Ukraine in the amount of EUR 500mn did not impact the market. The funds were provided as a loan maturing in 2033 at 1.25% per annum. Ukraine’s benchmark 10-year Eurobonds fell 0.9% last week to close at 94.2/94.7 (10.7%/10.6%), with the issue having lost 5.5% since its placement in late October. The country’s longest outstanding issue, Ukraine-32s, fell 1.5% to 79.9/80.9 (10.2%/10.0%). The medium-term sovereigns with maturity in 2023 were little-changed at 90.9/91.9