Fixed Income

June 18, 2019
 

Ukrainian sovereign Eurobonds saw notable gains for the third week in a row amid renewed risk appetite on global financial markets. Among the main Ukraine-related headlines for the week, the IMF officials confirmed that cooperation with Ukraine could be resumed after the completion of parliamentary elections in the country late next month. Meanwhile, the Finance Ministry used a window on the international market to raise EUR 1.0bn through a placement of 7-year Eurobonds at 6.75%. The final yield for the issue was lower than initial guidance of 7.125% due to solid demand of EUR 5.5bn for the bond from investors. The country’s longest outstanding Eurobonds with maturity in 2032 jumped by 2.8% to 91.4/92.4 (8.6%/8.4%), and medium-term Ukraine-24s rocketed forward by 5.5% to 100.2/100.9 (7.8%/7.7%). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) also had a big week, adding 6.3% to 66.5/67.5 cents on the dollar.