Bonds: Eurobond YTMs increase slightly

Обзор облигаций 11.09.2014 Ukrainian Eurobond YTMs rose further yesterday, with the yield curve adjusting to the range of 10.61-13.09%, as UKRAIN 6.875% '15 rose 84bp to 13.09%, UKRAIN 6.58% '16 and UKRAIN 6.75% '17 rose 51bp to 12.43% and 11.75% respectively, UKRAIN 9.25% '17 rose 46bp to 12.79%, while UKRAIN 7.95% '21, UKRAIN 7.80% '22 and UKRAIN 7.50% '23 increased 33bp to 10.85%, 10.67% and 10.61%, respectively. The 5-year CDS declined to 1,053bp. Investment implications: With no positive news about the situation in eastern Ukraine, the signing of a new law in Ukraine, and no clarity on the nature of the sanctions to be imposed on Russia all drive yields higher yesterday. We do not expect market sentiment to change anytime soon, and the yield should remain above 10.0%, set to rise even higher on negative news.