Ukraine Bonds Gain With Hryvnia as Fitch Sees No Debt Writedowns
(Bloomberg) — Ukraine’s bonds and currency gained after
Fitch Ratings said holders of the securities may avoid
writedowns on the principle value of the debt following
restructuring negotiations.
Ukraine’s benchmark notes maturing July 2017 gained 1.26
cents to 46.70 cents on the dollar at 4:07 p.m. in Kyiv, the
highest level in three weeks. The hryvnia, the world’s worst-performing currency last year, appreciated 5.8 percent to 21.5
against the greenback.
The government has indicated it will opt for a
straightforward extension of maturities and no reductions to
the face value of the bonds, Paul Rawkins, a senior director at
Fitch, said in a phone interview Tuesday. The International
Monetary Fund is expected to approve $17.5 billion in emergency
aid on Wednesday, setting off negotiations with creditors who are
due $5.4 billion this year.
“Fitch’s statement is helping as it feeds into widespread
sentiment that the IMF board will approve the new support
package tomorrow,” Per Hammarlund, the chief emerging-markets
strategist at SEB AB, said by e-mail.
Ukraine will enter into consultations with bondholders once
the IMF approves its aid agreement, Finance Minister Natalie
Jaresko said Feb. 12. Its ability to service debt has been
curtailed as international reserves slid by almost two thirds to
$5.62 billion as the central bank fought to end a rout in the
hryvnia amid a conflict with separatists in the country’s east.
The country has about $18 billion of international bonds
outstanding, according to data compiled by Bloomberg News. The
hryvnia has gained 57 percent since closing at a record 33.75
against the dollar on Feb. 26.
“Fitch sounded optimistic and investors are looking
forward to seeing the IMF money soon,” Vladimir Miklashevsky, a
strategist at Danske Bank A/S in Helsinki. “But I would say:
show me some money first for any optimism.”
To contact the reporter on this story:
Lyubov Pronina in London at
lpronina@bloomberg.net
To contact the editors responsible for this story:
Daliah Merzaban at
dmerzaban@bloomberg.net
Matthew Brown, Stephen Kirkland