Ukraine’s sovereign bonds rose in price after Donald Trump’s win in the U.S. presidential elections as investors expect a quicker end to the war, the Financial Times reported on Nov. 14.
Over the past month, the country's dollar-dominated bonds have risen 12%, FT reported, as investors anticipate Trump will push for a ceasefire that could jumpstart Ukraine's recovery and ability to repay its creditors.
The outlet pointed out that the jump in Ukrainian bonds began in mid-October when markets began to believe in a Trump victory.
Trump has pledged to end the war within "24 hours," sparking fears he might push Ukraine toward painful territorial concessions to achieve a quick peace deal.
The rise in price follows an agreement reached in September between Ukraine and its creditors to restructure more than $20 billion in international debt. The deal shrank Ukraine's state debt by $9 billion, allowing it to avert default and helped its economy stay afloat amid Russia's full-scale war.
The country's bond maturing in 2036 rose from 44 to 49 cents on the dollar in the past month, FT reported. GDP-warrants, a growth-related fixed-income instrument, also jumped to a record high following Trump’s election since Russia’s full-scale invasion began in February 2022.
The FT also reported that a bond owned by Ukraine's state-owned grid operator Ukrenergo rallied more than 160% to 67 cents on the dollar. Bloomberg reported last week that Ukrenergo announced it would suspend bond payments on its dollar-denominated notes that mature in 2028 and would seek a restructuring agreement with creditors.
Not all investors are so bullish about Ukraine's recovery prospects. Portfolio Manager at Federated Hermes Mohammed Elmi told the FT that "There is still a significant amount of unanswered questions” about the country's future after any potential negotiated settlement.
Martin Fornusek
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