Finance Ministry attracts UAH 41.8 mln at local bond auction

Ukraine’s Finance Ministry sold UAH 41.8 mln in local bonds at a primary auction yesterday. The government offered three new series with 3M, 9M and 2Y maturities. Market demand totaled UAH 562 mln (3M-UAH 220 mln and 2Y-UAH 242 mln). The Finance Ministry accepted the lowest bided yields of 4.70% for 3M and 9.0% for 2Y papers. Svetlana Rekrut: The Finance Ministry accepted yields that were well below the market bids again. New 3M papers were sold with a 4.70% yield, 300-350 bps below secondary market levels and 210 bps less than 3M Certificates of Deposit from the NBU. The Finance Ministry also refused to increase 2Y yields and accepted the lowest yield of 9.0%, meeting only 9% of market demand.  Yesterday’s primary auction results are in line with our expectations and indicate the Finance Ministry’s tough stance on keeping its borrowing costs low. We see the next 3-4 primary auctions also being weak given the government’s lack of considerable repayment until September.