Dmitry Churin, Head of Research, Eavex Capital: Quotes for Ukrainian sovereign Eurobonds rose moderately last week amid an improving domestic political situation that saw a new coalition finally formed after 2 months of wrangling and uncertainty. The shortest outstanding issue, Ukraine-19s, gained 0.4% to close at 94.3/95.0 (9.8%/9.5%), while benchmark 10-year Ukraine-26s were little-changed at 89.0/89.8 (9.4%/9.3%). Investors had a positive attitude toward the appointment of 38-year-old former
Dmitry Churin, Head of Research, Eavex Capital:
Quotes for Ukrainian sovereign Eurobonds rose moderately last week amid an improving domestic political situation that saw a new coalition finally formed after 2 months of wrangling and uncertainty. The shortest outstanding issue, Ukraine-19s, gained 0.4% to close at 94.3/95.0 (9.8%/9.5%), while benchmark 10-year Ukraine-26s were little-changed at 89.0/89.8 (9.4%/9.3%). Investors had a positive attitude toward the appointment of 38-year-old former Vinnytsia mayor Volodymir Groysman to replace outgoing prime minister Arseniy Yatseniuk, whose key allies will nonetheless remain in the new Cabinet. Groysman’s appointment was approved by 257 MPs, comofortably above the minimum figure of 226. Among particular new ministers, we note that Oleksandr Danyliuk has moved over to the Finance Ministry from the presidential administration, replacing Natalia Jaresko, who oversaw the bailout negotiations with the IMF and foreign creditors. Danyliuk previously worked for the consulting group McKinsey & Co. and could be described as a progressive/technocratic figure. At this stage we assume that Groysman/Danyliuk will do enough to get at least the next two IMF tranches, with an optimistic projection being that they can keep the program on track for at least a year. The appointment of the new government has already helped to unlock another USD 1bn loan guarantee from the United States.
In corporate debt, iron ore and steel related issues were on the rise amid improving global market conditions. Ferrexpo-19s advanced by 5.7% to 69.8/72.0 (25.6%/24.1%) and Metinvest-17s, which are under restructuring, added 4.1% to close at 51.2/53.5 cents on the dollar. Banking sector bonds were also higher. PrivatBank-18s rose 1.4% to 70.0/75.0 (33%/29%) and quasi-sovereign OschadBank-23s climbed 0.5% to 87.5/88.6 (12.1%/11.8%). ru.cbonds.info
2016-4-19 19:16