MinFin raises UAH 15 bln at the local bond auction

Ukraine’s Finance Ministry raised UAH 15.0 bln at its
weekly bond auction on Dec. 28 after raising UAH 12.1 bln and USD 307 mln (the
total equivalent of UAH 20.5 bln) at the auction last week. The auction
receipts came from the placement of 3M, 6M, 1Y, 2Y and 3Y bonds.

Around two-third of all auction receipts came from the
sale of 3M and 6M bonds. In particular, 13 bidders bought 6M bonds for UAH 5.4
bln at 10.80% and 11 bidders bought 3M bonds for UAH 5.2 bln at 10.50% (the
same rate as a week ago).

MinFin satisfied 13 bids for 2Y bonds for UAH 2.8 bln
at 12.90% (vs. 12.78% last week). In addition, 20 out of 21 bidders were
successful in purchasing 1Y bonds for UAH 1.5 bln at 11.90% (vs. 11.88% last
week). The least auction receipts, at UAH 49 mln, came from the sale of 3Y
bonds to eight out of nine bidders at 12.90% (the same rate as a week ago).

In 2021, MinFin placed net local bonds for about UAH 50.2
bln (excluding UAH 21.8 bln bonds issued outside the market), of which
placement of local currency bonds brought net proceeds UAH 63.7 bln.

Evgeniya Akhtyrko: Assessing
market risks as high, the investors prefer the local bonds with the lowest
terms of maturity. The interest rates for 1Y and 2Y bonds inched up again.

Next month, the government’s thirst for local debt
is likely to go down, given the traditional economic slowdown in the beginning
of the year. The short-term bonds are likely to stay in the highest demand.
Their moderate pricing makes them advantageous for the government, while the
investors are trying to lower their risks by avoiding bonds with longer
maturity.