The international bonds of Ukraine fell on Monday to their lowest level in more than a month after the confrontation between Ukrainian president, Volodymyr Zelenskiy, and US president, Donald Trump, last week he turned off the hopes that kyiv would get the back of Washington.
The expiration in 2036 registered the greatest fall, lowering 4.5 cents to quote 60,775 cents per dollar, its lowest level in a month, they showed the Tradeweb data. The bonds in which the size of future payments was linked to economic performance suffered the most pronounced falls, and transactions have been very active, according to an operator.
The Ukraine GDP bonus – which pays more if the economy grows strongly – was also under pressure, falling around 2 cents to quote just over 80 cents. Ukraine’s debt has been in a roller coaster in recent weeks, driven by geopolitics and uncertainty about how much support is willing to provide the Trump administration to the nation devastated by war.
“Pessimism has undoubtedly been the best strategy in relation to the new US administration,” said Paul Mcnamara of GAM. “I don’t see economic reasons to invest.”
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Fall of all favorable indices for Ukraine
The growing tensions in mid -February, when Trump described Zelenskiy as “dictator” and resumed relations with Russia, made the bonds fall dramatically. But most of the maturities had recovered many of their losses last week at the expectations that Zelenskiy and Trump could reach a very publicized mineral agreement during the trip of the Ukrainian leader to Washington, which kyiv expected to drive Trump to support the warlike effort of Ukraine.
That optimism was undone after the explosive Friday meeting that ended in an exchange of shouts in the Oval office, which led Zelenskiy to shorten his visit. “For Europe, including Ukraine, the geopolitical news of the last four weeks could hardly have been worse,” said Berenberg Schmieding.
The European leaders agreed to prepare a peace plan for Ukraine to present it to Washington after a meeting in London on Sunday, a vital step for the United States to offer security guarantees that kyiv considers essential to deter Russia. Zelenskiy believes that he can save his relationship with Trump and was still willing to sign a mineral agreement. “There was a lot of solidarity towards Ukraine after the meeting, but still depends on the participation of the United States,” said Jim Reid of Deutsche Bank in a client note.
After the restructuring of most of its international bonds, completed in September, Ukraine owes about 15.2 billion dollars in nominal value in eight new instrument series, in addition to about 2.6 billion dollars in concept of GDP Warrants that is expected to restructure. The earliest expiration of the new bonds is 2029.
With Reuters information.
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