03 Февраля 2020

Ukraine’s sovereign Eurobonds declined notably last week, with the longest outstanding issue Ukraine-32s losing 1.9% to close at 108.0/108.8 (6.4%/6.3%). Among the news which put pressure on quotes was the National Bank’s estimate that the country’s economic growth slowed to 2.2% YoY in 4Q19 after the impressive rise of 4.1% YoY seen in 3Q19. In political news, US Secretary of State Michael Pompeo held a generally non-controversial press briefing with President Zelenskiy in Kyiv where he stated that the United States is committed to supporting the territorial integrity of Ukraine. Pompeo affirmed the US position that Washington will never recognize Crimea’s reunification with Russia. Zelenskiy called on US companies to participate in natural gas and oil extraction in Ukraine and invited them to bid for the development of the Black Sea shelf. Medium-term Ukraine-24s Eurobonds lost 1.5% to 109.4/110.1 (6.4%/6.2%), while the VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) edged down by 0.7% to close at 99.3/100.3 cents on the dollar.