Ukraine’s bond market rallies 150% amid strong performance over four-year advance

Ukrainian sovereign bonds have staged one of the most remarkable rallies in emerging-market debt history. Over a four-year stretch that began during the depths of a full-scale war, dollar-denominated Eurobonds have surged more than 150%, rewarding investors who bet that Kyiv’s financial backbone would hold together even as its cities were under bombardment. The rally is still running strong heading into the second half of 2026, with bonds hitting post-restructuring highs in December 2025. How a $20 billion restructuring changed the game The inflection point came in September 2024, when Ukraine completed a $20 billion Eurobond restructuring. Bondholders accepted a haircut of more than one-third on the nominal value of their holdings. A bond issued by Ukrenergo, Ukraine’s state-owned grid operator, rallied more than 160% in 2024 alone, reaching 67 cents on the dollar. Its 2036 maturity bond moved from 44 cents on the dollar to 49 cents within a single month following the US presidential election that November. GDP-linked warrants attached to the restructured bonds also saw striking price movements. These instruments, which pay out more when Ukraine’s economy grows faster, became a po...