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Ukraine bonds drop sharply following Trump-Zelensky argument, Reuters reports

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Ukraine bonds drop sharply following Trump-Zelensky argument, Reuters reports
U.S. President Donald Trump and Ukrainian President Volodymyr Zelensky meet in the Oval Office at the White House on Feb. 28, 2025 in Washington, DC. (Andrew Harnik/Getty Images)

Ukraine's international bonds fell to their lowest point in over a month on March 3 after a heated exchange between Ukrainian President Volodymyr Zelensky and U.S. President Donald Trump last week, Reuters reported.

According to Tradeweb data cited by Reuters, the 2036 maturity experienced the steepest decline, dropping 4.5 cents to 60.775 cents on the dollar and reaching a one-month low.

Bonds tied to economic performance declined the most, with trading activity remaining high, one trader told Reuters.

Following Trump’s election in November last year, Ukraine’s sovereign bonds rose in price as investors expected a quicker end to the war, the Financial Times reported on Nov. 14. But Ukraine's debt has fluctuated dramatically in recent weeks due to geopolitical tensions and uncertainty about Trump's willingness to support the war-torn country.

Tensions escalated in mid-February when Trump called Zelensky a "dictator" while improving relations with Russia, causing bond prices to drop sharply, Reuters reported.

Ukraine's GDP warrant, which increases payouts during strong economic growth, also came under pressure, dropping around 2 cents to trade at just over 80 cents on March 3.

"The new U.S. administration calls for pessimism," Paul McNamara at GAM told Reuters. "I see no economic reason to invest."

According to Reuters, most bonds had recovered many losses last week as investors anticipated a minerals agreement during Zelensky's Washington visit, potentially securing Trump's backing for Ukraine's war effort.

This optimism collapsed after Friday's confrontation ended in shouting in the Oval Office, prompting Zelensky to cut his visit short.

Ukraine completed a debt restructuring with bondholders last September and now owes around $15.2 billion across eight new series of bonds, as well as $2.6 billion on a GDP warrant. The exchange reduced Ukraine's external debt by about $9 billion. The earliest maturity date for the new bonds is 2029.

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Yana Prots

Newsroom Intern

Yana Prots is an intern on the business desk of the Kyiv Independent. She previously worked as a journalist at the NGO Center of United Actions and as a social media editor at Hromadske media. Yana holds a bachelor’s degree in journalism from the Taras Shevchenko National University of Kyiv and completed a year as an exchange student at the University of Zurich. Now, she is pursuing a master’s degree in International Finance and Investment at the Taras Shevchenko National University of Kyiv.

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