Investors have lost hope for a quick end to the war in Ukraine.

Last week, the prices of Ukrainian Eurobonds dropped below the level before last year’s US presidential election.

Eurobonds have lost all the gains generated by hopes for an early end to the war, according to a report by ICU.

The value of Ukrainian securities fell by an average of 5% over the week. Eurobonds of the B series maturing in 2035-2036 lost the most – about 7%. Last Friday, all Eurobonds were already worth an average of 3% less than before the vote for the next US president last November. The price of GDP warrants fell by 7% to ¢62 per $1 of notional value.

“No progress was made in the ceasefire talks last week, so Ukrainian Eurobonds were in line with the general trend of emerging markets,” analysts said.

And the overall emerging market bond index fell by 2.9% last week. The tariff wars also had a negative impact on investor sentiment, which continued to seek safe havens for their funds by selling the debt of less stable countries. The pessimistic trend accelerated the decline in prices of Ukrainian securities.

Only the threat of additional sanctions against Russia by the United States can change the situation, the ICU believes.

Market analysts do not rule out that the further dynamics of Ukrainian bonds will depend not only on political decisions but also on signals from international financial institutions. For example, any hint of a debt restructuring or a new IMF program could significantly change investor sentiment.

Interesting: Currently, Ukrainian Eurobonds are trading at a yield of more than 30% per annum, which indicates a high risk premium. For comparison, Latin American securities with a similar credit rating have an average yield of about 9-12%.