Ukraine War Bonds Are a Chance to GameStop the Evil Empire

(Bloomberg Opinion) -- Vladimir Putin's unprovoked invasion of Ukraine induces a feeling of helplessness in people who are not fans of autocracy or war crimes. We want to help, but short of strapping on a rifle and heading for Kyiv, there's not much we can do besides maybe turning our Twitter avatars gold and blue.

One classic way to alleviate this feeling is to send money. And people are donating to the many charitable groups helping Putin's victims in Ukraine. People are donating lots of crypto, too. This may feel like a dubious favor, considering crypto's wild volatility, but most of the swings have been upward these days.

But what if we told you there was a way to lend money directly to Ukraine's embattled government and maybe get huge interest payments in the bargain? Ukraine this morning gave investors a chance to do this by selling $277 million worth of war bonds. It's a storied method of government fund-raising in times of conflict, most actively used in other European conflicts, namely World Wars I and II. Given Ukraine's dicey credit rating and current dire circumstances, investors got a fat 11% yield, more than 5 times the coupon on a 30-year Treasury bond.

On one level, this might speak to how desperately investors are chasing yield, no matter the source, at a time when high-grade interest rates are still near rock-bottom. To call this debt “risky” would be an understatement. This is a sovereign borrower that might not have sovereignty next week, and good luck trying to collect from Putin. Even if every Russian troop were miraculously raptured off the battlefield today, leaving Ukraine victorious and free, the country would still face a long, expensive cleanup from the damage already done.

Ukraine did manage to make $300 million in outstanding coupon payments today, which is sort of shocking, considering. Many investors would probably have understood if Ukraine had chosen to spend that $300 million on Stinger missiles or something else instead. This seems like a country with an admirable dedication to paying its debts.

But maybe the real benefit for investors was the satisfaction of helping to hand $277 million to a government fighting the good fight. Such quaint considerations as return and capital preservation might become a distant memory for those looking for a chance to make an investment combining qualities of both ESG and meme investing.

The defining story of investing in 2021 was the GameStop revolution, which routed at least one major hedge fund and made people feel good about banding together to fight the Wall Street power. Surely weaponizing investments to fight Vladimir Putin and save democracy could offer something close to that value, even if they don't pay out in the end.

Update: Sure enough, some of the Reddit crowd is interested in these bonds, Bloomberg News reports. They're struggling to actually get their hands on any, however.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mark Gongloff is an editor with Bloomberg Opinion. He previously was a managing editor of Fortune.com, ran the Huffington Post's business and technology coverage, and was a columnist, reporter and editor for the Wall Street Journal.