Morning Commentary: Ukraine continues to struggle; investors eye MHP, Mriya Agro paper

By Christine Van Dusen

Atlanta, Aug. 8 – Ukraine remained in focus at the end of the week, with sovereign and corporate bonds declining, as Russian troops continued to gather at the Eastern border and fighting ramped up in and around Donetsk and Luhansk.

The region is “heading into what is likely to be a tense weekend,” according to a report from Eavex Capital. “Meanwhile, the main European indices declined for a seventh straight session on concerns that the Russia sanctions roll-out is threatening the euro zone’s economic recovery.”

Ukraine’s 2023 notes declined about 0.8 percentage points to 88.60 bid, 89.80 offered, the report said.

Ukraine-based poultry producer MHP SA’s 8¼% notes due in 2020 – which priced in March at par to yield Treasuries plus 697 basis points – entered the end of the week down about 2.4 percentage points at 83.90 bid, 87 offered.

Meanwhile, Ukraine-based Mriya Agro Holdings remained in the news, with Standard & Poor’s lowering its corporate credit rating to Selective Default from CCC after the company defaulted on some debt.

The ratings agency also lowered the issue rating on the group’s $400 million notes due 2018 to CC from CCC and the group’s $250 million notes due 2016 to CC from CCC.

S&P said the downgrade follows the group’s decision to miss some payments on certain debt obligations while nominating financial advisers and engaging in discussions with lenders for a debt restructuring.

© 2015 Prospect News.
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