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Ukrainian Bond Prices Rebound Sharply as Peace Prospects and Aid Bolster Outlook
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Ukraine’s government bonds climbed to post-restructuring highs as investors responded to signs of progress in efforts to end the war and to policy steps aimed at stabilizing the country’s public finances, Reuters reported on December 29..
The outlet reported that the most actively traded dollar bonds gained about 1 cent on the dollar, extending a rally that has built over the past six weeks. The move pushed benchmark 4.5% bonds due 2034 and 2035 back near early-February levels.
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The price gains also reflected continued backing from official lenders, Reuters said, pointing to an International Monetary Fund program worth $8.2 billion over four years and a European Union loan package of $105.83 billion.
Ukraine has also agreed to replace GDP-linked warrants dating back to its 2015 restructuring, instruments that investors have long viewed as a potential future drain on state revenues.
Reuters also added that longer-dated growth-linked securities tied to future economic performance were still trading below earlier highs, with two such issues at about 57 cents on the dollar compared with nearly 70 cents in February, highlighting continued sensitivity to the outlook for debt sustainability and the path of economic recovery.
Earlier this year, Ukraine reached a deal with a committee of Eurobond holders to restructure roughly $23.4 billion in external debt securities as part of an effort to restore debt sustainability.
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