Finance Ministry places another UAH 253.4 mln in USD-indexed government bonds

Ukraine’s Finance Ministry placed UAH 253.4 mln in USD-indexed government bonds on Friday.  Market demand amounted to UAH 253.4 mln (one bid) for 5Y bonds with 8.75% yield, which was accepted. Svetlana Rekrut: Friday’s auction volume was the lowest of the four so far for these new securities. The decline in demand might be related to limited market capacity given the three previous placements and tight banking system liquidity. In total, the Finance Ministry has sold UAH  4.5 bln in the new bonds, including 3Y bonds – UAH 0.7 bln (8.22% YTM), 5Y bonds – UAH 2.8 bln (8.75% YTM) and 10Y – UAH 1.0 bln (9.25% YTM). We see the yields as unattractive as they have been below the Sovereign Eurobonds curve but with much lower liquidity and still not fully hedged currency risk (see our note dated October 5).