Thursday, December 11, 2014

NEAR COLLAPSE: Ukraine Bond Yields Climb Above 50%

Ukraine's most imminently maturing bond has plunged to a record low, as fears rise that the country will be forced to default on its international debts – and is now trading at a yield of over 50 per cent.

The International Monetary Fund and Western countries bailed out Ukraine after the revolution earlier this year, but Russia's annexation of Crimea, the war with Moscow-backed eastern separatists and the shrinking economy have has caused the financial situation of the country to unravel.

The IMF estimates that Ukraine needs $15bn more in the coming weeks to avoid a total collapse.

The next Ukrainian bond to mature is a $500m security that is due next September, but it appears investors are increasingly in doubt whether it will ever be repaid.

The bond is today trading at just 74.7 cents on the dollar, equal to an annualised yield of 50.04 per cent.

(via FT)

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