Ukraine’s Eurobonds jumped the most in almost
two months after a local magazine reported that a deal to restructure $19
billion of debt would be signed with creditors on Thursday.
The nation’s $2.6 billion of notes maturing
in July 2017 gained 2.16 cents to 55.54 cents on the dollar at 7 p.m. in Kiev,
headed for the biggest daily gain since July 2. Ukraine’s Novoye Vremya
magazine reported Wednesday that a debt deal will be signed
tomorrow, citing an unnamed source in Ukraine’s Finance Ministry. "There
is no deal yet," Finance Ministry spokeswoman Daria Marchak said by phone
from Kiev. A spokesman for the creditor committee declined to comment.
A deal would end five months of negotiations
between the war-torn nation and a creditor group led by Franklin Templeton. The
sides appeared to come closer to reaching an agreement this week when a person
with knowledge of the negotiations said they are considering a 20 percent cut
to face value, half of what Ukraine was originally demanding of bondholders.
“Some market participants had been expecting
more difficult negotiations with the possibility of a halt of payments,”
said Gintaras Shlizhyus, a Vienna-based strategist at Raiffeisen Bank
International AG. “We seem to be facing a mild scenario where the restructuring
is completed before the September maturity.”
Ukraine’s $1.25 billion of bonds maturing in
April 2023 rallied 2 cents to 54.79 cents on the dollar, while the
country’s shortest-maturity bond, which matures on Sept. 23, climbed 1.09
cents. Ukraine must give bondholders 21 days notice before voting on changes to
the terms on the bonds.
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