Fixed Income

April 03, 2018

Ukrainian sovereign Eurobonds rebounded in value last week, halting the pattern of correction seen since late February. News that the country’s balance of payments continues to improve and that state energy giant Naftogaz could start recovery of USD 2.6bn debt from Russia’s Gazprom awarded by Stockholm Arbitration were among positive factors for the country’s bonds. The longest issue, Ukraine-32s, saw a firm rise of 2.3% to 96.4/97.2 (7.8%/7.7%) and medium-term Ukraine-23s gained 0.7% 103.3/104.0 (7.0%/6.9%). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) advanced by 1.9% to 69.5/70.3 cents on the dollar.