Local bond auction raises UAH 1 bln for Ukraine state budget

Ukraine’s Finance Ministry sold UAH 956.6 mln in local
bonds at its weekly auction held on June 26 after UAH 9.5 bln was sold last week. Almost all
auction receipts came from the sale of 3M bonds while only UAH 1.0 mln came
from the sale of 3Y bonds to one bidder.

MinFin satisfied two bids for 3M bonds at 17.35%, rejecting
a third bid at 17.40%. Recall, in the June auctions, the weighted average
interest rates for 3M bonds did not get lower than 17.41%. Three-year bonds
were sold to one bidder at 15.00% while another bid at 16.45% was rejected. The
government did not sell 5Y bonds to three bidders willing to buy them at
16.35%.

Evgeniya Akhtyrko: The lower
interest rates yielded at this auction are not likely to signify any new trend
on the primary bond market at the moment. The sale of 3Y bonds at 15.00% was a
surprise but it should not be taken seriously given the symbolic sale amount of
UAH 1 mln.

We do not expect any significant moves in interest
rates on local bonds until the situation with receiving the next
IMF loan tranche is clarified.