Ukraine bonds stage cautious rally on draft US critical minerals deal

KYIV (Reuters): Ukraine’s international bonds enjoyed cautious gains on Wednesday after Kyiv agreed on the terms of a draft critical minerals deal with Washington seen as central to its push to win support from President Donald Trump’s administration.

The dollar-denominated bonds added between 0.4-0.6 cents on the dollar, Tradeweb data showed. The 2029 maturity, the biggest gainer in early European trading, was being bid at 71.6 cents.

Details of the draft agreement were still scant.

A source familiar with the contents said that it does not specify any US security guarantees or continued flow of weapons but says that the United States wants Ukraine to be “free, sovereign and secure.”

“The deal can be seen as part of a bigger puzzle, broadening relations with the US to strengthen Ukraine’s prospects after three years of war, according to Ukraine’s deputy prime minister and justice minister who led the negotiations,” said Oscar Christian Dahl Pedersen at Danske Bank.

Ukraine’s bonds, which were launched as part of last year’s August restructuring deal, have been on a rollercoaster in recent days.

The debt suffered sharp declines after Trump last week falsely called Ukrainian President Volodymyr Zelenskyy an unpopular “dictator” who needed to cut a quick peace deal or lose his country. The Ukrainian leader said the US president was living in a “disinformation bubble.”

The bonds recovered some of those losses in recent days.