Ukraine dollar bonds and GDP warrants extend Trump-win rally

By Libby George and Karin Strohecker

LONDON (Reuters) - Ukraine's sovereign dollar bonds and GDP warrants extended a post-U.S. election rally on Thursday on optimism that Donald Trump's return to the White House could end the country's war with Russia.

Longer-dated maturities saw the biggest gains, with 2035 paper rising by more than 2 cents to its highest since the bonds were launched in early September as part of the country's debt restructuring.

By 1306 GMT, the gains pared to 1.7 cents, bidding at 48.65 cents on the dollar.

Ukraine's GDP warrant - a growth-linked fixed income instrument that is still earmarked for restructuring - added 2.6 cents to its highest since Russia's invasion in February 2022, Tradeweb data showed, before retracing to bid at 75.95 cents.

"It was one of our calls for this year that if indeed Trump were to come to power, he will effectively bring a stop to war and pave the way for the reconstruction of the country," said Yerlan Syzdykov, global head of emerging markets at Amundi.

"We have a positive view on Ukrainian bonds, and warrants as well, as I think the recovery of GDP potentially could be also significant in case of peace."

The bonds had already risen some 2% on Wednesday, contrasting with most other emerging market bonds, which notched smaller gains on Thursday as markets digested a bumper U.S. dollar and sliding U.S. treasuries.

The former U.S. president has promised a quick end to the conflict, though he has yet to outline a precise plan to force the warring sides to make concessions.

In an address to EU leaders on Thursday, Ukraine's President Volodymyr Zelenskiy said it was up to Ukraine to decide the terms for ending the war, and warned that concessions to Russian President Vladimir Putin were unacceptable for Ukraine and "suicidal" for Europe.

The Kremlin on Wednesday said only time would tell if Trump's rhetoric on ending the Ukraine war translated into reality.

Ukraine has been highly dependent on U.S. support since Russia's 2022 invasion, and recently concluded its second debt rework in a decade prompted by Russian incursions into its territory.

Source: Investing.com