Ukraine bonds fell sharply this week as investors reacted to the White House bust-up and suspension of US military aid
Bonds have since stabilised after more constructive soundings but it is too soon to know how events will play out
We assess the implications of recent events for the bonds and highlight seven key considerations for bondholders
Ukraine's bonds fell sharply this week as investors reacted to the bust-up in the White House last Friday and the subsequent suspension of US military aid for Ukraine on Monday. The contingent B bonds (35B/36B) were down nearly 6pts on Monday, the long conventional A bonds (35A/36A) down 3pts, and the front end (29A/30B) was also down 3pts. It was hard to see these developments as being anything but negative for the bonds.
Bonds have since stabilised through the rest of the week, up 0.5-1.5pts across the curve as of this morning according to Bloomberg (although that still leaves the 29A down 2.7pts, the 35A/36A down 1.5pts and the 35B/36B down 5pts on the week). This comes after Ukraine's President Zelensky's olive branch on Tuesday in which he said in a personal letter to US President Trump that Ukraine is ready to come to the negotiating table as soon as possible and that he is ready to sign the mineral deal at any time. US National Security Advisor Mike Waltz said that the mineral deal was moving in a positive direction.
Read the full report on the Tellimer App
Stuart has over 20 years’ experience as an economist in both the public and private sectors and has been covering EMs since 2000. He joined Tellimer in July 2006 and heads the team of macro and fixed-income analysts. Previously, he worked for the UK government Economic Service and as an Economic Adviser at the Export Credits Guarantee Department.