Ukraine’s bonds update record: what investors saw in Trump’s statements
31 December 12:33
Ukraine’s government bonds showed a significant increase, reaching their highest levels since the exit from last year’s debt restructuring, amid cautious optimism among investors about possible progress in peace talks between Ukraine and Russia. This was reported by "Komersant Ukrainian" with reference to Reuters.
According to the agency, Ukrainian government bonds rose in price by about 1 cent per dollar of face value. Some securities have reached their highest levels since the completion of the $20 billion sovereign debt restructuring that Ukraine carried out last year.
Investors welcomed the results of talks between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy on Sunday. According to Reuters, the two sides made some progress on security guarantees for Kyiv, although key disagreements over territories remain unresolved.
Trump himself said that the parties are “getting closer, maybe very close” to an agreement to end the war.
Growth in the bond market
The bond market has been rising for about a month and a half now, amid intensified diplomatic efforts to end the nearly four-year war.
In particular, one of the most liquid securities, the 4.5% coupon bonds maturing in 2034 and 2035, has almost returned to the levels of early February. Back then, the market plummeted after Trump’s public criticism of Zelenskiy and a tense conversation in the Oval Office.
IMF and EU support boosts investor confidence
An additional growth factor was the announcement of
- a new four-year IMF program worth $8.2 billion
- a large-scale EUR 90 billion loan from the European Union to support Ukraine’s financial stability.
In addition, Kyiv has recently concluded a long-awaited agreement to replace the so-called GDP warrants, instruments linked to economic growth that were introduced during the 2015 debt restructuring after Russia’s annexation of Crimea. These instruments could have put significant pressure on the budget after the war ended.
Not all securities recovered equally
Despite the overall growth, not all Ukrainian debt instruments have returned to their previous peaks.
Bonds tied to future GDP growth, which do not have regular coupons and mature in 10 years or less, are currently trading at around 57 cents to the dollar. For comparison, in early February, their price reached almost 70 cents.
Cautious optimism, but no guarantees
Reuters analysts note that hopes for peace have been repeatedly dashed over the past year, but the current dynamics of Ukrainian bonds indicate renewed investor optimism-at least financial markets are increasingly pricing in the possibility of a truce.
At the same time, geopolitical risks remain high. On Monday, Trump also had a phone conversation with Russian President Vladimir Putin, after which Moscow again made accusations about an alleged attack on Putin’s residence, which Kyiv categorically denied.
Read us on Telegram: important topics – without censorship
