According to DCM bankers, Ukraine has been waiting for its presidential elections to pass before announcing a new public bond, likely in euros.
It needs the money. There are some big maturities this year to cover — $1.4bn of external debt in May and another $3.3bn or so by the end of the year. Of that, around $1.5bn still needs to come from the international bond markets.
A softening in Ukraine's spread this week — a classic case of buying the rumour and selling the fact, following the country's presidential election — may prompt the sovereign to delay raising a bond.
Who wants to issue now when they could have issued cheaper a week ago? It feels wrong. But that is an emotive argument, not a logical one.
Summer is coming, and for bankers and investors, that is almost as bad as winter in Game of Thrones.
The markets shut down with the school holidays — as we’ve all been reminded by the last fortnight’s iced primary markets around Easter — and Ukraine has its parliamentary elections in October, before which, the bond markets are likely to be on ice for Ukraine again.
And, it bears repeating, Ukraine needs this money, needs it badly enough that a few weeks ago the country printed a private placement for $350m well below market value, with rumours abounding that the note had been sold in its entirety to JP Morgan.
According to analysts, there is plenty of good news to be found in the presidential results this week, not least that the elections were free, fair and the result is not being contested.
The country looks set for a smooth transition of power and western governments seem supportive, which will help in areas such as the Minsk peace process and relations with the IMF.
In short, the market seems happy enough with Volodymyr Zelensky’s victory, even though investors may have preferred Petro Poroshenko.
The market's main concern about Zelensky is the uncertainty he brings — his views have been described as “nebulous” by elements of international media, including CNN.
Because of that, there is a sense that Ukraine’s strength in the bond markets could go either way now. Zelensky's policies, and capacity to implement them, are an unknown quantity, which could prove market-friendly or otherwise.
But as the market waits to find out, Ukraine’s upcoming maturities are not going anywhere.
It would be an act of market friendliness in itself to handle the problem sooner rather than later, which could start a virtuous circle and cut the cost of Ukraine’s debt. But even if that circle is not triggered, Ukraine has few options.
A default would be unacceptable to international investors and would mark Zelensky as a determinedly market unfriendly head. That could cause Ukraine untold problems for his duration in power. It's better to play it safe than run the risk of being sorry.