LONDON Aug 28 Ukrainian and Russian dollar bond price fell sharply on Thursday while debt insurance costs for both countries rose further after Kiev said Russian troops had been "brought" into the country.
Ukrainian President Petro Poroshenko said in a statement he was cancelling a trip to Turkey because "Russian troops have actually been brought into Ukraine".
"The key reason why Russian and Ukrainian assets are moving lower is Ukrainian officials' statements that Russian troops are in Ukraine. This is serious stuff, and it's hurting stocks, bonds and currencies," said Liza Ermolenko, an economist at Capital Economics in London.
Ukraine's sovereign bonds maturing 2017, 2022, 2023 fell 1.5-2 cents on the dollar while five-year credit default swaps (CDS) rose to a new three-month high of 1,049 basis points, up 67 bps from Wednesday's close.
The CDS had traded earlier in the day at 1,016 bps, according to data from Markit.
Russian assets were also affected, with the 2020, 2030 dollar bonds down around 1.5 cents and 5-year CDS rose to 253 bps, jumping 26 bps from the previous close. (Reporting by Sujata Rao and Alexander Winning, editing by Nigel Stephenson)