Finance Ministry cancels this week’s local UAH sovereign bond auction

The Finance Ministry cancelled a primary local UAH sovereign bond auction scheduled for yesterday due to high yield bids, while market demand grew by 12x compared to last week’s previous auction. The Finance Ministry planned to offer four series with maturity in 3M, 9M, 2Y and 5Y. Market demand amounted to UAH 360.0 bln (four bids, 3M – 57% of total demand, 2Y – 42% and 9M – 1%) with yields at 12.0-13.5%. Svetlana Rekrut: Yesterday’s auction was last before the today’s rescheduled repayment of UAH 1.4 bln in face value in bonds by the Finance Ministry. However, market demand totaled just 25% of the expected redemption, reflecting low market interest in new placements. The Finance Ministry refused to accept the higher yields, in line with our expectations given the government’s clear policy of keeping borrowing costs low.