Ukraine Riots Flash Buy Signal to Foreigners as Bonds Scooped Up - Bloomberg

Ukraine Riots Flash Buy Signal to Foreigners as Bonds Scooped Up - Bloomberg:

"As Ukrainians took to the streets of Kiev on Nov. 22 to protest a government decision to break off European Union trade talks, foreign investors piled into local-currency bonds. As protests raged on, they kept buying.

Non-resident investors boosted their holdings of hryvnia sovereign debt by 55 percent within 24 hours on Nov. 22 to 6.73 billion hryvnia ($813 million), as the government faced a backlash to its decision to focus on repairing economic ties with Russia. Since then, foreign holdings of Ukrainian debt jumped to 9.37 billion hryvnia yesterday, the most since April 2011, according to data on the central bank’s website.

Investors buying debt of Europe’s least credit-worthy borrower are betting President Viktor Yanukovych will get enough foreign aid to stem a plunge in foreign reserves (UAINRSL) and meet almost $17 billion of debt payments through 2015. Ukraine sold hryvnia notes due in 2020 at 14.3 percent on Dec. 10, compared with 13.9 percent on seven-year debt in Egypt, which like Ukraine holds Moody’s Investors Service’s fifth-lowest credit rating."

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