Bonds: Eurobond YTMs decline

Обзор облигаций 23.10.2014 Ukrainian Eurobond YTMs adjusted to the range of 10.78-19.99% yesterday. UKRAIN 6.875% '15 declined 11bp to 19.99%, UKRAIN 6.58% '16 was down 75bp to 14.41%, UKRAIN 6.75% '17 slid 30bp to 12.87%, UKRAIN 9.25% '17 declined 75bp to 14.28%, while UKRAIN 7.95% '21, UKRAIN 7.80% '22 and UKRAIN 7.50% '23 slid 4bp to 11.43%, 11.04% and 10.78%, respectively. The 5-year CDS declined to 1,270bp. Investment implications: Yields declined as spreads to the benchmark slightly tightened, especially at the short-term end of the yield curve. The main reason for these improvements could be news of a possible resolution of Naftogaz's debt repayments to Gazprom, particularly in settling on a new price for this winter. This positive news could improve the situation further as the financial situation in Ukraine could become more clear and predictable.