Ukraine raises UAH 1.6 bln from local bonds, cuts interest rates

Ukraine’s Finance Ministry raised UAH 1.6 bln at its
weekly bond auction on Oct. 29 after drawing UAH 3.0 bln at the auction
last week. MinFin offered 3M, 1Y and 2Y UAH-denominated bonds.
Almost 90% of the auction receipts – UAH 1.4 bln – came from the sale of 2Y
bonds, which were purchased by 15 out of 23 bidders with a weighted average
interest rate of 14.64% (vs. 15.10% for the same bonds two weeks ago).

In addition, four out of five bidders were successful
in buying 1Y bonds for UAH 149 mln with a weighted average interest rate of
14.27% (vs. 14.80% for the same bonds last week).

MinFin satisfied all six bids for 3M bonds for UAH 34
mln with a weighted average interest rate at 15.35% (the same rate as two week
ago).

Evgeniya Akhtyrko: We were
right in our prediction about the drop in auction receipts this week.
The activity of non-resident investors declined from last week as they are most
interested in purchasing Ukraine’s local bonds with terms of maturity of three
years and longer, which were not offered this time.

The government will offer 3M, 1Y and 4Y
UAH-denominated bonds next week, and we are likely to see a rise in auction
receipts as 4Y bonds will draw more non-resident investors.