Fixed Income

November 06, 2017
 

Ukrainian sovereign Eurobonds rose last week, following the overall trend in emerging markets. In recent months, Ukrainian debt has almost stopped reacting to the country’s internal developments, and has been moving more or less in line with the global EM debt picture. Last week Fitch affirmed Ukraine’s sovereign rating at ‘B-’ with a “stable” outlook. In its comments, Fitch said that increased exchange rate flexibility is allowing Ukraine’s economy to absorb shocks without depleting the NBU’s forex reserves. Ukraine’s 15-year sovereigns placed in September gained 0.9% to 98.4/98.9 (7.6%/7.5%), and medium-term sovereigns with maturity in 2022 edged up by 0.2% to 107.0/107.5 (6.0%/5.9%). The shortest outstanding issue, Ukraine-19s (due in 22 months from now), ended 0.4% higher at 105.3/105.8 (4.7%/4.4%). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) shed 0.4% to 56.8/57.3 cents on the dollar.