Finance Ministry fails to place local bonds at auction

The Ministry of Finance did not place local bonds at a scheduled primary auction yesterday. The government offered two short-term series with 3M and 9M maturities, and two series of 2Y and 5Y bonds. Market demand totaled UAH 0.50 bln (3M – UAH 0.26 bln and 2Y – UAH 0.25 bln) with 7.75% and 10.0% yields, respectively. The Finance Ministry rejected all bids. Svetlana Rekrut:  Yesterday’s auction result was predictable and evidence of the government’s unwillingness to borrow at market yields. We believe this will continue at least through summer given the Finance Ministry’s cash position is sufficient to repay UAH 2.8 bln coming due on July 27 and the lack of further considerable redemptions until September.