Fixed Income

September 30, 2019

Ukrainian sovereign Eurobonds finished mixed last week amid the huge controversy over the transcript of a July 25 telephone conversation between President Zelensky with US President Donald Trump in which Trump appeared to make improper demands from Zelenskiy in return for USD 250mn in military assistance. In other news from the call record, Zelensky complained that French President Macron and German Chancellor Merkel are not doing as much as they could with sanctions to help Ukraine to deter Russian aggression. The longest outstanding Ukrainian Eurobonds due in 2032 rose by 1.1% to 101.5/102.4 (7.2%/7.1%), while the medium-term benchmark Ukraine-24s fell 1.3% to 108.7/109.5 (6.8%/6.5%). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) dropped by 2.8% to 92.8/93.8 cents on the dollar on profit-taking; the value of these papers has shot up by 30% since mid-July.