Sovereign bonds of Ukraine rose sharply against the background of investors' expectations regarding the plans of the future administration of Republican Donald Trump to end the criminal war unleashed by the Kremlin as soon as possible.
Points of attention
- Ukraine's sovereign bonds have seen a significant increase in value following expectations that Trump's administration will help end the war with Russia.
- The completion of Ukraine's $20 billion debt restructuring has boosted interest in its bonds on the international market, allowing the country to control its wartime budget effectively.
- Expectations of peace negotiations and the possible return of occupied territories have fueled optimism among bondholders, leading to economic recovery prospects for Ukraine.
- The rise in Ukrainian sovereign bonds over the past months signifies the positive impact of Trump's intentions to resolve the conflict, resulting in a 12% increase in value.
- The successful debt restructuring in September has enabled Ukraine to reenter the bond markets, offering investors the chance for higher payouts if the country's economy experiences growth as part of the agreement.
What is known about the growth of Ukrainian bonds against the background of expectations about the end of the war after Trump's arrival in the White House
According to the journalists of the publication, during the last month, the dollar bonds of Ukraine increased in price by 12% against the background of hopes that after the arrival of Trump in the White House, an agreement on the ceasefire will be reached.
It is noted that expectations from the new presidential administration of Trump have already strongly influenced the international financial market and, among other things, provoked the growth of Ukrainian bonds.
The increase generally comes over the past two months, after Ukraine completed a $20 billion debt restructuring in one of the fastest and largest sovereign debt settlement operations in modern history.
The bondholders expect that Ukraine will agree to peace talks and the probable loss of the territories occupied by Russia, which will contribute to the recovery of the destroyed economy in the coming years.
Ukrainian bonds maturing in 2036 rose in price over the past month from 44 to 49 cents per dollar. So-called "GDP warrants" — debt securities issued as part of an old debt restructuring that benefit from a resumption of growth in the country — rose even more.
What is known about Ukraine's successful debt restructuring
Initially, bondholders agreed not to receive interest payments from Ukraine.
The September restructuring, designed to pave the way for Ukraine's return to bond markets, ended a two-year freeze.
Under the September deal, investors agreed to take losses on their bonds by more than a third to help Ukraine control a growing wartime budget deficit — years before official creditors such as Britain, the US, Germany and Japan is going to restructure its own debts.
In exchange for agreeing to absorb losses, bondholders were also given the opportunity to receive higher payouts if Ukraine's war-torn economy achieves growth targets in the coming years.
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