Ukrainian bonds plummet to historic low amid Russian attacks on infrastructure

17 October 2022, 05:25 PM
Ukrainian Eurobonds over the past week lost an average of about 7.9% in price. (Photo:NBU)

Ukrainian Eurobonds over the past week lost an average of about 7.9% in price. (Photo:NBU)

Ukrainian Eurobonds over the past week – amid Russian attacks on energy infrastructure and threats to disrupt the extension of the grain initiative – lost an average of about 7.9% in price and are quoted near the level of historical minimum, the Interfax-Ukraine news agency reported on Oct. 17.

According to Bloomberg, the smallest decline was recorded at the short end of the curve: in particular, dollar-denominated Eurobonds-2025 fell by 2.8% to 22.9% of par value, which corresponds to a yield of about 72.4% per annum.

Dollar-denominated Eurobonds maturing in 2026-2030 were quoted by end of business on Oct. 14 in the range of 18.3-19.9% of par, which is 1.3-2.1% lower than a week earlier, and their current rates rose to 69.8-41.7% per annum.

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The price of the longest dollar securities, maturing in 2031-2035, decreased by 1.4-1.8% to 17.7-17.2% of par value. Now their yields are 36.5-34.3% per annum, respectively.

As for Eurobonds in euros, the dynamics of their value was similar – a decrease by an average of 8.2%. At the end of last week, securities maturing in 2028 were quoted at 18.2%, in 2032 – at 17.4% of the face value. Given the lower nominal interest rate compared to dollar securities, this corresponded to a yield to maturity of 48.8% in the first case and 32.1% per annum in the second.

GDP warrants fell slightly less – by 5.1%, to 26.7% of the notional value.

In general, in the month after the bump partial caused by Ukrainian military successes, the quotations of Eurobonds of Ukraine fell by an average of 20.1%, GDP warrants – by 20.3% and dropped to a level close to the historical minimum.

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