MinFin local bond auction receipts jump to UAH 19 bln

Ukraine’s Finance Ministry raised UAH 14.2 bln and USD
182 mln (UAH 19.1 bln in total equivalent) at its weekly bond auction on June 8
after raising the equivalent of UAH 15.9 bln at the auction a week ago. The
auction receipts came from the placement of 6M, 14M, 18M, 2Y, 3Y and 5Y UAH
denominated bonds as well as 1Y USD bonds.

The largest UAH receipts – UAH 4.4 bln – came from the
sale of 2Y bonds to all 17 bidders at 12.05% (vs. 12.04% for these bonds a week
ago). MinFin satisfied all 36 bids for 14M bonds for UAH 3.4 bln with a
weighted average interest rate of 11.19% (vs. 11.20% for these bonds a week
ago). All 16 bidders were successful in purchasing 3Y bonds for 2.6 bln at
12.30% (the same interest rate as for these bonds a week ago).

MinFin satisfied 27 out of 35 bids for 5Y bonds for
UAH 2.0 bln with a weighted average rate of 12.52%. In addition, all nine
bidders were successful in purchasing 18M bonds for UAH 1.7 bln at 11.30% (the
same rate for these bonds a week ago). The rest of  the UAH auction
receipts – UAH 106 mln – were brought by six buyers of 6M bonds with a weighted
average interest rate of 8.99%.

MinFin satisfied all 93 bids for 1Y USD denominated
for USD 182 mln at 3.70% (the same rate for these bonds a week ago).

Evgeniya Akhtyrko: The UAH
auction receipts increased more than two-fold compared to the previous auction.
It’s very likely that this impressive result was just an outcome of additional
efforts by MinFin, which included the “personal targeting” of the most
influential participants of Ukraine’s primary bond market. The additional
inflow was needed as the stocks in public coffers were likely depleted after high repayments on local bonds
last week.

Meanwhile, USD auctions receipts were far from
stellar. Apparently, the market participants didn’t rush to rollover their USD
receipts from the redemption of local Eurobonds for USD 806 mln on June 3.

Next week, MinFin plans to offer five types of UAH
denominated bonds with maturity ranging from three months to three years as
well as 1Y EUR denominated bonds. It is interesting whether or not MinFin is
able to keep the auctions receipts at the new volumes reached at the latest
auction.