MinFin raises UAH 22 bln at local bond auction

Ukraine’s Finance
Ministry raised UAH 18.3 bln and USD 138 mln at its weekly bond auction on Dec.
22, compared to UAH 51.4 bln (in the equivalent) at the auction last week. The
auction receipts came from the placement of nine types of UAH-denominated bonds with
maturity ranging from 3M to 4Y, as well as 1Y USD-denominated bonds.

Three-quarters of
UAH auction receipts came from the placement of bonds with maturity of 1Y and
less. MinFin satisfied all 33 bids for 1Y bonds for UAH 5.1 bln with a weighted
average interest rate of 11.62%. In addition, 13 out of 15 bidders were
successful in purchasing 4M bonds for UAH 3.8 bln with a weighted average
interest rate of 10.25%. The sale of 6M bonds to 14 out of 15 bidders at 10.75%
brought UAH 3.2 bln. On top of that, MinFin satisfied 16 out of 17 bids for 3M
bonds at 10% for UAH 1.6 bln.

Meanwhile, the
demand for UAH bonds with the longest term of maturity was also high. MinFin
satisfied 16 out of 17 bids for 4Y bonds at 12.25% for UAH 2.2 bln. In
addition, 14 out of 16 bidders were successful in purchasing 1.5Y bonds for UAH
1.5 bln at 11.75%. The rest of UAH auction receipts came from the placement of
2Y bonds (UAH 182 mln at 11.85%), 3Y bonds (UAH 398 mln at 12.0%) and 3.5Y
bonds (UAH 300 mln at 12.15%).

MinFin satisfied 34
bids for USD bonds at 3.8%, leaving out one bid for 3.85%.

Evgeniya Akhtyrko: It was
widely expected auction receipts would fall after the record-high result of the prior week.
However, the results of the latest auction are still very high. The raised
resources will help to prop up 2020 budget expenditures, the money for which
has fallen short of plan. We suppose that state-owned banks were highly
involved in this rescue.

Meanwhile, the interest rates were comparable to those
of the prior week’s placement, and most bids were on the expected target.

MinFin’s plan next week is to offer only UAH-denominated bonds with
maturity ranging from 3M to 5Y. The auction receipts might be high enough to
accommodate the last-minute government spending of 2020.