MinFin receipts from local bonds drop to UAH 0.3 bln

Ukraine’s Finance Ministry raised UAH 0.3 bln at its
weekly bond auction on July 7 after drawing UAH 1.3 bln at the auction
last week. The auction receipts came from the placement of 3M,
1Y, and 2Y bonds.

The lion’s share of the auction’s receipts – UAH 292
mln – came from the sale of 3M bonds to three bidders with a weighted average
interest rate of 7.24% (the same rate for these bonds as a week ago). In
addition, three bidders bought 2Y bonds for UAH 16 mln at 10.20% (compared to
10.39% for these bonds last week). The rest of the auction receipts – UAH 5 mln
– came from the sale of 1Y bonds to a sole bidder at 9.5% (vs. 9.7% for these
bonds two weeks ago).

Evgeniya Akhtyrko: Apparently,
last week’s resignation of NBU Governor
Yakiv Smoliy significantly damaged the confidence of local bond market players,
though only causing a slight drop in auction receipts. Market participants
understand that an ever-increasing likelihood of the NBU losing its independence
poses a high threat of intensified devaluation of the national currency, which
makes UAH-denominated debt less attractive.

Next week, MinFin will try to improve its receipts at
the local debt market by offering 1Y local dollar bonds, which usually find
high demand among market participants. At minimum, MinFin could expect some
players will roll over some of the USD 672 mln they will have received from the
redemption of 1Y local Eurobonds on July 9.