Ukraine local bond auction raises UAH 1 bln for state budget

Ukraine’s Finance Ministry sold 3M, 6M, 9M, 1Y, and 3Y
UAH-denominated bonds for a total amount of UAH 998 mln at an auction held on
May 8. The interest rate for 3M bonds, which brought in 44% of auction
receipts, inched up to 17.40% from 17.36% three weeks ago. Nine auction
participants bought 3Y bonds at a total amount of UAH 243 mln at 16.15%, the
same as at previous placement on Apr. 10.

Demand for the rest of the bonds offered at the
auction was weak. Five participants bought 9M bonds for UAH 163 mln at 17.22%
(vs. 17.30% at the previous placement on March 27). One-year bonds, which
raised UAH 101 mln, were placed at 17.00% (vs. 16.99% on Apr. 24). The interest
for 6M bonds (17.20%), which brought in only 5% of auction receipts (UAH 49
mln), was the same as at the last auction on Apr. 24.

Evgeniya Akhtyrko: The auction receipts were close to the amount raised by UAH-denominated
bonds placed at the previous auction on Apr. 24 (UAH 1.1 bln). The steady interest rates are
likely to indicate that this amount is satisfactory for covering current
government needs in budget financing. Meanwhile, continuing demand for
long-term bonds points to an increased share of market participants who are
ready to invest in UAH-denominated instruments. This is a sign of increased
stability on Ukraine’s financial market.