BNP Paribas (EU:BNP)
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By Matt Wirz
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (June 11, 2019).
Ukraine is preparing to issue its first international bond under the administration of President Volodymyr Zelensky, a former comedian who was elected in April amid widespread discontent about corruption in the country, people familiar with the deal said.
French bank BNP Paribas SA and Goldman Sachs Group Inc. will underwrite the euro-denominated deal and are arranging a roadshow through European financial capitals this week for Ukrainian officials to meet investors, the people said.
The deal will be of benchmark size, meaning at least EUR500 million ($567 million), and comes amid a flurry of new bond issuance globally as declining U.S. and European interest rates encourage borrowers to tap capital markets. The government of Ecuador is feeling out investors about a new bond sale this week, one of the people said, and Fiserv Inc. launched a bond deal today backing its $22 billion acquisition of First Data Corp.
The yield on the benchmark 10-year Treasury note, which falls as prices rise, ended at 2.143%, according to Tradeweb, up from 2.085% Friday. Trade tensions and concerns about global economic growth have dragged the 10-year yield down from a multiyear high of 3.232% reached in November.
Ukraine finance officials will meet with investors in Frankfurt, London, Milan and Paris this week to gauge interest in a new seven-year bond, the people familiar with the deal said. The roadshow contrasts sharply with Ukraine's previous deal in March, when the country quietly borrowed about $350 million directly from JPMorgan Chase & Co., an unusual move aimed at avoiding market turbulence surrounding the presidential elections.
Ukraine last borrowed in public markets in October when it issued $2 billion of bonds via BNP, Goldman and JPMorgan.
Ukrainian bond yields soared last year as investors sold out of emerging-markets debt broadly and as Mr. Zelensky gained in polls, stoking uncertainty about his economic strategy and ability to deal firmly with Russia, which has waged a proxy war in eastern Ukraine for five years.
Yields on the country's medium-term bonds climbed to about 10.5% in January from about 7% a year earlier but have dropped precipitously to about 8% since Mr. Zelensky was elected and moved quickly to strengthen Ukraine's ailing economy and tackle conflict with Russia-backed separatists.
--Daniel Kruger contributed to this article.
Write to Matt Wirz at email@example.com
(END) Dow Jones Newswires
June 11, 2019 02:47 ET (06:47 GMT)
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