Ukrainian sovereign bonds have experienced a remarkable rally, surging over 150% in dollar-denominated Eurobonds since the start of the full-scale war. This strong performance, continuing into the second half of 2026, has seen bonds reach post-restructuring highs in December 2025, defying initial expectations.
The turnaround was largely spurred by a $20 billion Eurobond restructuring completed in September 2024, which saw bondholders accept a haircut of over one-third. Additionally, a bond issued by Ukrenergo, the state-owned grid operator, rallied more than 160% in 2024, reaching 67 cents on the dollar. GDP-linked warrants, designed to pay more with economic growth, also saw significant price movements, becoming a popular investment for those anticipating a post-war recovery.
International financial backing has been crucial, with the IMF approving an $8.2 billion program and the European Union providing a financing package of approximately €90 billion. Major investors like BlackRock and Shiprock Capital have capitalized on these gains. Despite the rally, domestic government bonds continue to offer weighted average yields in the mid-teens for hryvnia-denominated securities as of mid-2026, indicating a persistent risk premium and potential for further upside as peace talks progress.
