MinFin bond auction receipts jump to UAH 6.5 bln

Ukraine’s Finance Ministry raised UAH 3.0 bln and USD
130 mln at its weekly bond auction on Aug. 31 after raising UAH 0.8 bln at the
previous auction two weeks ago. The auction receipts came from the placement of
1Y, 1.5Y, 2Y, 3Y and 6Y UAH denominated bonds as well as 2Y USD denominated
bonds. Bond interest rates either didn’t change or underwent insignificant
changes from the previous auctions.

The sale of 2Y USD bonds to all 51 bidders brought
more than half of all auction receipts. The interest rate for 2Y USD bonds
didn’t change, staying at 3.90%.

The largest UAH auction receipts – UAH 1.3 bln – came
from the sale of 18M bonds to 11 bidders at 11.30% (the same interest rate for
comparable bonds as two weeks ago). Nine bidders bought 3Y bonds for UAH 1.1
bln with a weighted average interest rate of 12.40% (vs. 12.30% for these bonds
two weeks ago).

MinFin satisfied 13 out 14 bids for 2Y bonds for UAH
268 bln at 12.09% (the same rate for these bonds two weeks ago). The sale of 6Y
bonds to 17 bidders at 12.75% (the same rate for these bonds as a month
ago)  brought UAH 252 mln. The rest of the UAH auction receipts – UAH 95
mln – came from the sale of 1Y bonds to 17 bidders at 11.15% (vs. 11.14% for
these bonds two weeks ago).

Evgeniya Akhtyrko: The
government receipts from local debt placements increased. However, it’s too
early to talk about a market revival, given the missed auction a week ago. The
hike of the interest rate for 3Y bonds might be a hint regarding the
government’s readiness for higher interest rates for reviving the market,
including the attraction of nonresident investors.

Next week, the government is to offer six types of
UAH denominated bonds with maturity ranging from six months to five years. We
might see a hike of interest rates for long-term bonds.