Ukraine corporate bonds hit by fear of devaluation, capital curbs | Reuters

Ukraine corporate bonds hit by fear of devaluation, capital curbs | Reuters:

"Dollar bonds issued by Ukrainian companies back in the easy-money times are taking a hit on doubts over the country's solvency and fears that a currency devaluation or capital curbs might propel firms into default.

Mass protests against the government's decision to spurn a cooperation deal with the European Union in favour of closer ties with Russia are inflicting more damage on an economy already in recession. And unless external aid materialises, the central bank, with just $20 billion in hard currency reserves, may struggle to hold the hryvnia's peg to the dollar.

Corporate bond prices have dropped 2-3 points across various maturities in recent days, some hitting lows they haven't visited for many weeks or months.

"Ukraine's problems are more on the sovereign side than on its corporate sector," said Apostolos Bantis, a corporate credit strategist at Commerzbank in London. "(But) a default scenario of the sovereign would have major spillover effects.""

'via Blog this'