Fixed Income

March 07, 2017

Quotes for Ukrainian Eurobonds were lower last week following a negative news flow related to developments in the Donbass separatist-occupied territories, whose authorities threatened to nationalize all Ukraine-registered enterprises by introducing “external administration”. There have been no additional specifics on the situation. Even more importantly, rogue Ukrainian paramilitaries who have been blockading industrial trade between Ukraine and the Donbass appear to have been emboldened by President Poroshenko’s lack of response, and they moved to expand their blockade outside the Donbass to Ukraine’s northern border with Russia, which is much closer to Kyiv. The Ukrainian presidential administration reported that there were two recent telephone conversations between Poroshenko and Russian President Putin regarding the Donbass developments. However, it appears that the Kremlin is enjoying Poroshenko’s political difficulties related to the blockade issue and the nominally pro-Ukrainian