08 Октября 2018

Ukrainian sovereign Eurobonds declined in value last week in line with the global market trend after US bond yields hit fresh multi-year highs on expectations of higher interest rates associated with strong US economic growth. The yield on benchmark 10-year US Treasuries jumped to 3.2%, surpassing the year-to-date high of 3.12% and representing the highest level since 2011. For several years, benchmark yields had been sitting in the 2% range. Longer-dated US bonds also sold off, with the yield on 30-year debt climbing to 3.33, its highest level in over 4 years. The lift in US yields was reflected across most sovereign bond markets. The longest Ukrainian outstanding Eurobonds with maturity in 2032 fell 1.5% to close at 85.2/86.2 (9.3%/9.2%) while the benchmark medium term issue, Ukraine-23s, decreased by 0.6% to 97.3/98.0 (8.4%/8.2%). The VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) lost 2.3% to end at 51.4/52.5 cents on the dollar.