ESCP Ukraine Fixed Income Weekly April 11, 2016
The prices of Ukraine’s long-term Eurobonds Ukraine-25, Ukraine-26, and Ukraine-27 remained unchanged at an average 89.6 cents last week. The other sovereign issues lost 0.5 cents on average. Ukraine-19 was quoted at an average 94.6 cents, Ukraine-20 at 93.9 cents, Ukraine-21 at 93.1 cents, Ukraine-22 at 92.2 cents, Ukraine-23 at 91.4 cents, and Ukraine-24 at 89.6 cents. The scandal related to the “Panama Papers’, which hit a blow at the Ukrainian President and the overall reputation of the country, together with the negative result of the referendum on the EU-Ukraine Association Agreement in the Netherlands have sent chilling win on the sovereign Eurobond market, in our view.
Three out of our five top picks gained in price last week. Prbank-18 and Prbank-21 gained 1 points each, whereas Ferrexpo-19 gained 0.3 points. Avinpu-18 remained unchanged, whereas Ukrlan-18 lost 0.5 points. Privatbank may have received support from the rumors about an agreement between the major stakeholder of the bank and the government as to the defense of the business interests of the bank’s shareholder. The negative development on Ukrlandfarming-18 is most likely follows the launch of the debt restructuring offer of the company last week.