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– Vandit P
Ukraine’s sovereign dollar bonds have gained 12% YTD after rising 10% last year. The rally comes on the back of the country securing enough financial support to withstand the war and eventually rebuild its economy. The up-move also reflects Ukraine’s resilience against Russia, advances in drone technology, improving battlefield performance and growing European support. Europe approved a €90bn ($106bn) loan earlier this year, strengthening expectations that Ukraine can continue financing its defense even as US support becomes less certain. Restructuring agreements with creditors have also improved the outlook. Ukrainian corporate bonds have also rallied strongly. However, analysts warn that the rally may have become excessive. Peace negotiations remain uncertain, while intensified Russian attacks could damage Ukraine’s energy infrastructure, ports and grain exports, threatening economic recovery. The country also faces political uncertainty, including calls for wartime elections, with its debt burden at more than 100% of GDP.
Its 4.5% 2029s currently trade near 84.6 cents on the dollar, compared to 58-59 cents in June last year.
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