Finance Ministry to Renew Local Bond Auctions.

The Finance Ministry announced that it would renew primary auctions of local government bonds. The ministry plans to hold auctions every two weeks, with the first to be held on Sept. 3 where the ministry plans to sell 2- and 3-year bonds. The ministry also plans to start selling 5-year bonds at its second auction on Sept. 18. The government said it hopes to raise about $900m by the end of the year, of which about $420m will fund the redemption of local debt that comes due in 2H06. The last local government debt auctions were in July 2005. Oleksandr Klymchuk: The renewal of auctions will add liquidity to the secondary market and provide a benchmark for corporate and municipal bond markets. The last deal on the secondary market was 9.3% for three-year debt (up from 7.5% for three-year debt at the last primary auction). By law, the government has the right to issue up to $1.2 bn of local debt in 2H06.