December 21, 2016 / 10:07 AM / 2 years ago

Ukraine dollar-bonds hit 6-week highs as budget boosts IMF tranche hopes

LONDON, Dec 21 (Reuters) - Ukrainian sovereign dollar bonds rallied across the curve on Wednesday after the passage of the 2017 budget boosted chances of securing the next tranche of the International Monetary Fund’s (IMF) $17.5 billion loan.

The budget keeps the deficit at 3 percent of gross domestic product - in line with the IMF requirements.

Bonds that were issued as part of a restructuring deal last year rose to six-week highs, with the exception of the 2019 issue which hit an eight week high, according to Tradeweb data.

The average yield premium paid by Ukraine’s bonds on JPMorgan’s EMBI Global Diversified index fell 18 basis points to the narrowest in over a year.

The spreads have contracted some 50 bps since the end of last week, helped also by the government’s decision to nationalise PrivatBank, the country’s biggest lender, which had been in dire straits. (Reporting by Karin Strohecker and Sujata Rao)

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