Finance Ministry Issues USD 63 Mln Government Bond

On 30 June, the Finance ministry sold 3-year bonds for USD 20 mln at 7.5%, 5-year bonds for USD 10 mln at 8.0%, and 1-to-2-year bonds for USD 33 mln at 6.3%. Concorde Capital: Yield rates on Ukrainian government bonds are beginning to grow. While in March the 5-year bonds were placed at 6.74%, the Finance Ministry placed the new bonds with the same maturity levels at 8.0%. The rise in yield rates was caused mainly by lower demand from foreign investors, due to the hryvnia?s sharp revaluation, combined with continuing expectations of high inflation rates (expected to be 14% annually). In 2005, the Finance Ministry had already raised USD 1.3 bn through a government bond issue. This is in excess of the USD 1.2 bn threshold set in the 2005 budget. However, the ministry has excluded a USD 0.6 bn from this amount, as it has been directed to a pre-term repurchase of government bonds from the National Bank.