Ukraine bonds at post-restructuring highs as investors see some progress in peace talks
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Ukraine’s bonds have surged in the last 1½ months in 2025 amid a renewed push to halt the near four-year-old war with Russia.
PHOTO: REUTERS
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- Ukraine's bonds rallied due to positive signs in peace talks, reaching their highest levels since debt restructuring.
- Trump and Zelensky discussed security guarantees, but territorial issues between Russia and Ukraine remain unresolved.
- Bond gains are boosted by IMF and EU support, plus a deal replacing “GDP warrants,” but some bonds lag behind.
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LONDON – Ukraine’s government bonds rallied on Dec 28 as investors saw some positive signs in talks on a deal to end the war with Russia, with some bonds hitting their highest since emerging from 2024’s US$20 billion (S$25.7 billion) sovereign debt restructuring.
There was progress on security guarantees for Kyiv
Ukraine’s bonds have surged in the last 1½ months amid a renewed push to halt the near four-year-old war and most added another 1 cent on the dollar on Dec 29, following a busy weekend of diplomacy.
Mr Trump said on Dec 28 that he and Mr Zelensky were now “getting a lot closer, maybe very close” to an agreement
Mr Trump and Russian President Vladimir Putin held a call on Dec 29, with Moscow also claiming Ukraine had tried to attack Mr Putin’s residence in northern Russia, an accusation that Kyiv denied.
Hopes for peace have been repeatedly dashed over the last year, but the moves in Ukraine’s bonds have signalled renewed optimism, among investors at least, that a truce might now be within reach.
The Dec 29 gains notably left Ukraine’s 4.5 per cent coupon 2034 and 2035 bonds – two of its most widely traded – almost exactly where they were in early February before Mr Trump’s branding of Mr Zelensky as a “dictator” scolding of him
The bonds have also been boosted over the last six weeks by plans for a new four-year, US$8.2 billion International Monetary Fund programme and a €90 billion (S$136.2 billion) European Union loan to shore up the government’s finances.
Kyiv has just struck a long-awaited deal to replace the so-called “GDP warrants” that helped it clinch its 2015 post-Crimea annexation debt restructuring, but had risked draining its finances once the current war ends.
Despite their widespread gains, not all of Ukraine’s bonds are above or back to their early February highs.
Two where the payments are linked to the country’s future economic growth rather than via regular coupons, and that will not mature for at least another 10 years, remain well below, at roughly 57 cents on the dollar, compared with almost 70 cents back in February. REUTERS
