Monday 16 December 2013

Fitch puts Ukraine on downgrade watch as bonds rally | beyondbrics #EuroMaidan

Fitch puts Ukraine on downgrade watch as bonds rally | beyondbrics:

"It’s not a downgrade, nor even a change in outlook, but a statement issued by Fitch Ratings on Monday is still a warning. Ukraine’s credit rating is under pressure and looking increasingly vulnerable.

Investors, you might think, already knew that. So it’s ironic that Fitch should speak out on a day when the yield on Ukraine’s benchmark 2023 bond fell to 9.86 per cent, down from a recent peak of 10.6 per cent on December 10, according to Thomson Reuters data. Why are investors so (comparatively) positive?


Source: Thomson Reuters

One reason – as Timothy Ash of Standard Bank and others have argued – is that they are ignoring the risk of cross-the-board default on Ukrainian government debt. As Ukraine’s inverted yield curve suggests, investors may believe trouble is round the corner but will be resolved in the longer term."

'via Blog this'

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