Morning Commentary: Ukraine bonds down, but EM debt mostly quiet after U.S. holiday

By Rebecca Melvin

New York, Nov. 26 – Selling hit some of Ukraine’s bonds and spreads were sharply wider on Monday as investors watched rising tensions in the region after news that Russia seized three Ukrainian navy ships on Sunday.

Ukraine was reported to be considering imposing martial law to quell civil unrest in that country related to the capture of the ships.

Ukraine bond spreads were called 40 basis points to 50 bps wider on the day. A month ago, Ukraine priced $2 billion of long five-year and 10-year senior notes. Trades were not heard in those issues, including the $1.25 billion of 9¾% notes due 2028, but Ukraine’s 7¾% notes due 2027 were indicated lower to about 85.20 from 87.15 previously.

Ukraine’s five-year credit default swaps moved out to 485 bps from 462 bps last week.

Overall, emerging debt was mostly quiet despite a rally in global stocks as investors stepped back into shares after a long holiday weekend in the United States for Thanksgiving.

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