Russian Sovereign Risk - Signs of Normalization

After weeks of active preparatory work, the prisoner exchange between Ukraine and Russia is seemingly approaching its final stage. Although there have been unanticipated delays, recent developments show that they might only be temporary. The swap may result in the release of some notable figures for both sides. Russian journalist Kirill Vyshinsky has already been released from a Ukrainian jail on bail, while Ukrainian filmmaker Oleh Sentsov, who was jailed in Yamal Region, has been delivered to Moscow. A meaningful exchange would not only reflect an improvement in bilateral relations, but would also strengthen the potential for further normalization. We see these developments as positive for Russia's sovereign credit profile.