Ukrainian Eurobond sentiment weakens

Обзор облигаций 23.01.2015 As the MoF and the IMF announced a potential agreement for a new financing program on Wednesday, the market responded by assessing a higher risk premium on Eurobonds. US treasury yields also slightly rose yesterday on news that the ECB announced the implementation of its own QE initiative soon. As spreads to benchmark widened significantly, up to 9,554bp for UKRAIN 6.875% '15, the yield curve adjusted to 19.57-95.70%, reducing prices to the range of 51-62. Investment implications: YTMs rose to above 90% yesterday as the market anticipated that bonds maturing this year most likely will be included in the debt restructuring, while the probability of including bonds maturing in 2020-2023 was significantly lower. Bonds maturing in 2017 traded at yields near 40% yesterday.