Ukraine's dollar bonds extend rally after Trump-Zelenskiy meeting

By Karin Strohecker

LONDON, Jan 22 (Reuters) - Ukraine's international bonds extended their rally to 3 cents on Thursday after meetings in Davos sparked a fresh bout of optimism for progress in ending the country's nearly four-year-old war with Russia.

Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump each praised the outcome of their hour-long meeting on the sidelines of the World Economic Forum in Davos, Switzerland, with Trump sending a message that "the war has to end."

The growth-sensitive 2035 and 2036 maturities made their biggest gains since August, jumping just over 3 cents to bid at around 55.50 cents on the dollar, Tradeweb data showed.

After addressing the Davos forum, Zelenskiy said Ukrainian and Russian teams will have their first trilateral meeting with U.S. officials in the United Arab Emirates on Friday and Saturday.

Trump said a deal was "reasonably close." U.S. envoy Steve Witkoff is heading to Moscow to meet with President Vladimir Putin later in the day.

Separately, Ukrainian chicken and grains processor MHP, a top food producer in the country, said it had priced a $450 million international bond maturing in 2029 with a yield of 10.5% as part of a refinancing transaction.

The move is the first corporate international bond sale since Russia's full-scale invasion of Ukraine in February 2022.

"MHP has reopened the market for Ukrainian corporates, and we expect select others will have an opportunity to follow," Gavriel Shaya, CEEMEA Bond Syndicate banker at JPMorgan, told Reuters.