MinFin raises UAH 2 bln at weekly local bond auction

Ukraine’s Finance Ministry raised UAH 2.0 bln at its
weekly bond auction on Sept. 29, compared to UAH 0.3 bln at the auction last week.
The auction receipts came from the placement of 6M, 1Y and 2Y bonds.

The lion’s share of the auction receipts – UAH 1.9 bln
– came from the sale of 6M bonds to two out of three bidders at 8% (vs. 7.82%
for these bonds two weeks ago). Nine out of 11 bidders were successful in
purchasing 2Y bonds for UAH 88 mln at 10.50% (vs. 10.43% for these bonds two
weeks ago). The rest of auction receipts – UAH 25 mln – came from the sale of
1Y bonds to three out of six bidders at 9.50% (vs. 9.46% for these bonds a week
ago).

Evgeniya Akhtyrko: The rising
interest rates at this latest bond auction was not sufficient to boost demand
for local Ukrainian bonds. As previously, most of the auction receipts were
likely generated by the state-owned banks.

The recent low volumes of raised state debt will
pose problems for financing budget deficits in the coming months. In this
situation, the government’s will have to noticeably hike interest rates for
local bonds and/or restrain budget expenditures.