There has been a relief rally in Ukrainian assets with the uneventful passing of Tuesday morning’s rumoured deadline for Ukrainian troops in Crimea to surrender to the peninsula’s Russian occupiers. Vladimir Putin appeared to pull further back from armed conflict in a mid-day press conference, so the rally may have more legs.
But yields are still at the brink.
Source: Thomson Reuters
The chart above shows Ukrain’s $1bn sovereign bond maturing on June 4. Those with the stomach can still get a yield of 40 per cent for just three months (on Monday, they could have got 51 per cent).
Source: Thomson Reuters
In the past few days, the 2014 bond has been under even more stress than the $1.6bn bond maturing on September 30 from Naftogaz, Ukraine’s state gas utility caught at the sharp end of the price agreement with Gazprom, its Russian counterpart. As the chart above shows, its yield has relaxed to a mere 37 per cent, down from a peak of 47 per cent on Monday.
The stress level may have subsided a bit but it is still near the top of a painful spike.
And here to complete the picture is the yield on Ukraine’s $1.25bn sovereign bond maturing in April 2013, back into single figures in Tuesday from its peak of just under 11 per cent on February 20.
Source: Thomson Reuters
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