Fixed Income

July 19, 2021

Ukrainian sovereign Eurobonds were on the rise last week as investors cheered the country’s effort to reform the judicial system. Parliament adopted a key piece of legislation for the transparent selection of members of the High Council of Justice and the High Qualification Commission of Judges. Judicial reform is one of the most crucial preconditions for Kyiv to unlock financial aid from the IMF, the EU and the World Bank. The benchmark long-term issue Ukraine-32s increased by 1.1% to 105.2 (6.8% YtM) and the medium-term Ukraine-26s Eurobonds edged up by 0.3% to 110.8 (5.3% YtM). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) were unchanged at 117.5 cents on the dollar, remaining just below their all-time high of 118.5 cents.