Ukraine Fixed Income Weekly (August 31, 2015)

Eurobonds overview

 Last week all sovereign Eurobonds gained on average 14.5 cents in prices, save Ukraine-15 and Ukraine-21, which gained 10.5 cents and 12.4 cents respectively. Nearly all Eurobonds traded at about 71,3 cents, with the biggest prices of 72 cents coming to Ukraine-15 and Ukraine-17. The sovereign bond prices were moved by the agreement between the Ad-Hoc committee and the Ukrainian Finance Ministry on the terms of restructuring of Ukraine’s debt to private creditors. The terms are seen to be mutually beneficial.

 

Among our top picks, Privatbank-18 and Privatbank-15 gained 3 cents and 2 cents respectively, whereas Finance and Credit-19 remained without changes. Ukrland-18 lost 0.1 cents. In our opinion, the price development on the Privatbank’s issues reflects investors support to the terms of the bank’s restructuring offer on the Privatbank-2015 issue. Ukraland-18 and Finance and Credit-19 remained nearly unchanged, as investors are looking for clarifying information from the side of the issuers as to their debt management and financial plans.

Money markets

Over the last week, the average USD/UAH exchange rate decreased by 1.9% w/w and stood at UAH 21.6, closing at the level of UAH 21.2 on Friday. The average daily FX turnover on the interbank market increased by 12.8% w/w to USD 289.6 mn, while FX trading volumes amounted to USD 304.4 mn on Friday. The average outstanding amounts held on banks’ correspondent accounts decreased by UAH 708.0 mn or by 2.9% w/w to UAH 24.1 bn. 

All Kievprime Indexes save the short-term Kievprime overnight (o/n) and the Kievprime 1W, which lost 0.3 percentage points each, remained unchanged last week. The Kievprime o/n and Kievprime 1W were quoted at 19% and 20% respectively. The Kievprime 2M, kievprime 3M, Kievprime 6M, and Kievprime 1Y were quoted at 26%, whereas the Kievprime 1M stood at 24%.

NBU extended no refinancing to banks during the week, whereas banks acquired NBU deposit certificates worth UAH 40.7 bn, compared with UAH 62.4 bn for the previous week. 

Local bond markets

The Finance Ministry made no placement on the domestic market last week. Secondary market activities for government bonds were distributed as following: short-term bonds made 49.8% of contracts, medium-term bonds represented 50.2%%, while there  were no deals with long-term bonds. All players cut their government bond holding over the past week, with local banks making the biggest sale (UAH 2 bn). The NBU sold government bonds worth UAH   365 nn, whereas local non-bank corporates sold gov. bonds in the volume of UAH 223 mn. Non-resident investors cut their holding of government domestic bonds by UAH 937 mn. The total turnover of local govt. bonds on the “Perspectiva” SE amounted to UAH 785 mn compared with UAH 2.8 bn for the previous week.

Corporate news

• Privatbank’s consent solicitation secured the support of a blocking group of note holders

• Avangard’s revenue down by 54% y/y to USD 121 mn in 1H2015, EBITDA negative

• DTEK published its 1H2015 operational results

• MHP’s revenue down by 14% y/y to USD 551 mn, EBITDA down by 1% y/y to USD 270 mn in 1H2015

• The Ukrainian infrastructure ministry unveiled the financial plan of Ukrzaliznytsa

 

Disclaimer

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