MinFin local bond auction receipts drop to UAH 8 bln

Ukraine’s Finance Ministry raised UAH 7.5 bln at its
weekly bond auction on Jan. 26 after raising UAH 12.3 bln at the auction last
week. The auction receipts came from the placement of 6M, 17M, 2Y and 3Y bonds.
Almost half of auction receipts – 3.6 bln – came from the sale of 17M bonds to
36 out of 37 bidders at a weighted average interest rate of 11.68%. The second
largest receipts – UAH 3.0 bln – were raised from the sale of 2Y bonds to 16
out of 22 bidders at a weighted average interest rate of 11.81% (11.94% for the
same bonds last week).

The interest rate for 6M and 3Y bonds declined. In
particular, 6M bonds were sold to 45 out of 51 bidders for UAH 479 mln at a
weighted average interest rate of 9.86% (vs. 10.73% for these bonds two weeks
ago). MinFin satisfied all 20 bids for 3Y bonds for UAH 439 mln at 12.15% (vs.
12.49% for these bonds a week ago).

Evgeniya Akhtyrko: Apparently,
MinFin is trying to shift demand to bonds with maturity of over one year. At
the moment, this tactic looks quite successful. But the situation at the market
might change quickly if the government sees heightened risks and/or the needs
rise in government borrowing.

Next week, MinFin plans to offer four types of UAH-denominated
bonds with maturity ranging from three months to three years. The auction’s
results are likely to be similar to these.