Bonds: Eurobonds improve on election results

Обзор облигаций 28.10.2014 The yield curve of Ukrainian Eurobonds adjusted to the range of 9.94-17.08% yesterday, as UKRAIN 6.875% '15 declined 111bp to 17.08%, UKRAIN 6.58% '16 and UKRAIN 6.75% '17 were down 65bp to 12.80% and 11.48% respectively, while UKRAIN 9.25% '17 and UKRAIN 7.50% '23 slid 40bp to 13.07% and 9.94% respectively, UKRAIN 7.95% '21 declined 35bp to 10.20% and UKRAIN 7.80% '22 slid 31bp to 10.25%. The 5-year CDS declined to 1,185bp. Investment implications: Yields continued to decline yesterday due to spreads tightening and US Treasury yields declining slightly. Spreads tightened most likely because pro-western parties had a momentous victory at Ukraine's recent parliamentary elections. Ukrainians' refusal to cooperate with Russia was positively evaluated by investors, who anticipate not only the current trend will continue but also that the Ukrainian government will take positive steps, possibly with few changes from the current appointed administration.