Bonds: Eurobond YTMs diverge

Обзор облигаций 15.10.2014 The Ukrainian sovereign Eurobond yield curve adjusted to the range of 10.97%-21.45% yesterday. UKRAIN 6.875% '15 rose 272bp to 21.45%, UKRAIN 6.58% '16 was up 39bp to 15.77%, UKRAIN 6.75% '17 rose 27bp to 13.47% and UKRAIN 9.25% '17 rose 42bp to 15.48%. UKRAIN 7.95% '21 rose 17bp to 11.84% while UKRAIN 7.80% '22 slid 8bp to 11.11% and UKRAIN 7.50% '23 declined 13bp to 10.97%. The 5-year CDS declined to 1,333bp. Investment implications: The divergence in YTMs yesterday was most likely the result of rising short-term negative anticipations amidst falling long-term risks. Spreads slightly tightened on the long-term end of the yield curve while those at the short-term end widened significantly. This situation will continue until after the upcoming elections.