Ukraine raises UAH 9.7 bln from local bond sale

Ukraine’s Finance Ministry raised UAH 5.6 bln, USD
142.5 mln, and EUR 4.0 mln (a total of UAH 9.7 bln in the equivalent) at its
weekly bond auction on Jan. 15 after raising the equivalent of UAH 0.07 bln at
the auction last week.

About half of the UAH auction receipts – UAH 2.7 bln –
came from the sale of local currency bonds maturing in 77 days. The government
satisfied 24 out of 34 bids with interest rates ranging from 19.0% to 19.5%,
with a weighted average interest rate of 19.2%. The second highest UAH receipts
– UAH 1.9 bln – were received from the sale of 1Y bonds to five out of nine bidders
at 18.5%. Ten bidders purchased 6M bonds for UAH 1.0 bln at 19.00%. In
addition, 8M bonds were sold to eight bidders for UAH 28.4 mln at 18.5%, while
five bidders bought 2Y bonds for UAH 24.2 mln at 18.25%.

The government satisfied all bids for USD- and
EUR-denominated local bonds. The highest USD receipts – USD 137.6 mln – came
from the sale of 3M bonds to ten bidders with a weighted average interest rate
of 6.47%. Eight bidders bought 1Y bonds for USD 3.5 mln at 7.25%. The rest of
the USD auction receipts came from the sale of 6M bonds to seven bidders at
6.7%.

Three auction bidders purchased 5M EUR-denominated
bonds for EUR 4.0 mln at a weighted average interest rate of 4.52%.

Evgeniya Akhtyrko: MinFin is
desperate to raise foreign currency in order to deal with high repayments in
local Eurobonds. On Jan. 16, the government is scheduled to repay USD 423.7 mln
local Eurobonds placed in December during the year-end rush.

MinFin’s plans to offer local Eurobonds at two more
weekly auctions in January. The holders of local Eurobonds are likely to roll
over their bond receipts from Jan. 16 by buying local Eurobonds at these
auctions.

The local UAH curve remains clearly inverted. The
bonds with the shortest maturity terms are in highest demand due to increasing
political risks related to the upcoming presidential elections.