While unofficial meetings with key bondholders could occur, we doubt that any proposals were submitted. Moreover, Russia’s decision to not join the restructuring appears to have had little impact.

Eurobond prices decline Ukrainian

Eurobond prices yesterday declined slightly to the range of 40-46, except for several bonds and those with the shortest maturity, after the US market opened. The weakness could be a reaction to Ukraine’s Minister of Finance’s visit and recent declarations. While unofficial meetings with key bondholders could occur, we doubt that any proposals were submitted. Moreover, Russia’s decision to not join the restructuring appears to have had little impact. Primary auctions cancelled The MoF changed its March auction schedule and cancelled the auctions of 2-year local currency bonds scheduled for this week and next week. As the MoF received the IMF’s debut tranche of EFF, this change was expected as the NBU recently increased its key rate and once more tried to tighten banking system liquidity. As banks have no extra liquidity to invest in new local currency bonds and the 2-year maturity is unappealing, the MoF appears to be unwilling to increase interest rates and offer shorter maturities to make new bonds attractive for investors. Auctions could be cancelled at least through the end of this month until the NBU is able to utilize domestic QE for primary market support. Taras Kotovych, Kiev, +38044 2200120 ext.724