Eurobonds mostly stable at low prices

Обзор облигаций 16.02.2015 Ukrainian Eurobonds stabilized at relative lows following a slight increase after the Minsk and IMF negotiations last week. Prices rose slightly above 50, adjusting the yield curve to 18.84-98.08% last Friday. The 5-year CDS slid to 2,498bp. Investment implications: The possible peace agreement sets the best chance so far this winter of receiving international support for the Ukrainian economy. However, despite the ceasefire and IMF's announcement of a possible US$40bn financing program for Ukraine for a 4-year period, the markets still await news of the debt restructuring. Because of this, prices rose slightly but remained at lows due to the significant risk of a principal haircut under a restructuring offer from the MoF following the IMF's debut tranche from the new EFF program.