06 Июня 2018

The market value of Ukrainian sovereign Eurobonds fell notably last week after government officials admitted that the Finance Ministry might try to enter foreign capital markets with a new bond issue that would represent a more expensive borrowing than previous ones. In another internal development that was not encouraging, Prime Minister Volodymir Groysman took away control over the State Fiscal Service from the Finance Ministry; this was a setback for the Ministry’s head Oleksander Danyliuk, who is well-respected by the IMF and foreign investors. Danyliuk said the move would be an impediment for reforming the State Fiscal Service. The longest outstanding Ukrainian Eurobonds, Ukraine-32s, lost 2.8% to close at 91.4/92.4 (8.4%/8.3%), and medium-term Ukraine-23s were down by 1.6% to 100.3/101.0 (7.7%/7.5%). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) declined by 1.7% to close at 69.4/70.4 cents on the dollar.