Fixed Income

September 21, 2020

Ukrainian sovereign Eurobonds declined on global trading platforms last week after an official IMF representative refused to name a possible date of the mission for the first revision of the current stand-by loan program. The revision is necessary before Kyiv can receive any additional IMF funds. The IMF is calling on President Zelenskiy to demonstrate the political will to protect the independence of the National Bank and the integrity of the National Anti-Corruption Bureau (NABU) and Special Anti-Corruption Prosecutor’s office (SAP) to ensure that corruption does not erode reform progress. The Ukraine-25s medium-term Eurobond dropped by 0.5% to 105.0 (6.6% YtM) and the Ukraine-28s issue declined by 0.3% to 114.2 (7.5% YtM). The country’s shortest Eurobonds, which are due next September in just under a year, shed 0.5% to 103.0 (4.5% YtM), and the VRI derivatives (linked to Ukraine’s future GDP growth with expiration in 2040) fell 1.2% to 95.8 cents on the dollar.