Ukraine raises UAH 13 bln from local bonds, rates drop below 16%

Ukraine’s Finance Ministry raised UAH 13.2 bln at its
weekly bond auction on Sept. 24 after raising UAH 2.8 bln at the auction
last week. MinFin offered 5M, 11M, 28M and 5.5Y UAH-denominated
bonds. The interest rates for the placed bonds declined 25-55 bps. The lion’s
share of auction receipts – UAH 12.9 bln – came from the sale of 5.5Y bonds to
55 out of 77 bidders with a weighted average interest rate of 14.75% (vs.
15.30% for the same bond a month ago).

Nine out of 12 bidders were successful in buying 28M
bonds for UAH 229 mln with a weighted average interest rate of 15.50% (vs.
15.77% for the same bond two weeks ago). In addition, MinFin satisfied four out
of five bids for 5M bonds for UAH 55 mln with a weighted average interest rate
of 15.89% (vs. 16.14% for the same bond two weeks ago). The smallest auction
receipts – UAH 43 mln – came from the sale of 11M bonds to three out of four
bidders at 15.09% (vs. 15.49% for the same bonds two weeks ago).

MinFin doesn’t plan any placement of local Eurobonds through
the year end, according to the schedule of bond auctions published on its
website. Meanwhile, the government is scheduled to redeem local Eurobonds for
USD 621 mln and EUR 471 mln in 4Q19.

Evgeniya Akhtyrko: The demand
for bonds with the longest maturity surged this week, enabling MinFin to lower
their interest rate below 15%. The overall trend on the primary local bond
market remains the same: the highest receipts come from bonds with the longest
maturity, while interest rates continue to decline across the board.