MinFin raises UAH 5.0 bln at local bond auction, hikes rates again

Ukraine’s Finance Ministry raised UAH 2.7 bln and USD
87 mln at its weekly bond auction on Sept. 21 after raising UAH 1.2 bln at the
auction last week. The auction receipts came from the placement of 6M, 1Y,
1.5Y, 2Y, and 3Y UAH denominated bonds as well as 2Y USD denominated bonds.

The sale of USD denominated bonds to all 25 bidders at
3.90% brought around half of all auction receipts. The rate has not changed
since beginning of 2021.

More than half of the UAH receipts – UAH 1.7 bln –
came from the sale of 1Y bonds to all 22 bidders with a weighted average
interest rate of 11.49% (vs. 11.37% last week and 11.15% two weeks ago). MinFin
satisfied all 14 bids for 15M bonds for UAH 621 mln with a weighted average
rate of 11.47% (vs. 11.49% a week ago and 11.30% two weeks ago). Seven out of
nine bidders were successful in purchasing 2Y bonds for UAH 245 mln with a
weighted average rate of 12.34% (vs. 12.09% for these bonds in all the previous
weekly tenders since July).

Five bidders purchased 3Y bonds for UAH 97 mln at
12.49% (vs. 12.30% for these bonds last week). On top of that, MinFin satisfied
two out of four bids for 6M bonds at 9.70% (vs. 9.73% for these bonds two weeks
ago).

Evgeniya Akhtyrko: Another
significant hike of interest rates for the most popular UAH denominated bonds
didn’t result in a considerable increase of UAH auction receipts. It looks like
only the return of nonresident investors to the Ukrainian debt market could
result in higher UAH receipts.

Next week, the government is to offer six types of UAH
denominated bonds with maturity ranging from three months to six years as well
as 2Y USD bonds. We expect auction receipts at UAH 4-5 bln.