Local bond auction raises UAH 0.3 bln for Ukraine state budget

Uraine’s Finance Ministry sold UAH 318 mln in local
bonds at its weekly auction held on May 15 after UAH 998 mln was sold last
week. Around 60% of auction receipts came from the sale of 6M and 2Y bonds.
Four bidders bought 2Y bonds for UAH 98 mln at 16.15%. Meanwhile, 6M bonds were
sold to seven auction participants for UAH 90 mln at interest of 17.20%,
unchanged from the prior week.

The interest rate for 9M and 1Y didn’t change from the
previous week either. Five bidders bought 9M bonds for UAH 75 mln with a
weighted average interest rate of 17.19%, while UAH 55 mln was raised from the
sale of 1Y bonds to three participants at 17.00%.

Evgeniya Akhtyrko: Significant swings in receipts of weekly local bond auctions are quite
normal given the very limited circle of potential bond buyers and the absence
of significant changes in interest rates. Meanwhile, the results of several
recent auctions show that the bidders currently prefer buying the shortest (3M,
6M) and the longest (2-5Y) bonds offered at the auction, while the yield curve
for local UAH-denominated bonds is clearly inverted. In particular, the
market’s growing interest in long-term bonds is a positive trend as it might
result in growing liquidity at the secondary local bond market.