MinFin raises UAH 24 bln at local bond auction
30 December 2020
Ukraine’s Finance Ministry raised UAH 14.5 bln and USD
323 mln (the total equivalent of UAH 23.6 bln) at its weekly bond auction on
Dec. 22, compared to UAH 18.3 bln and USD 138 (the total equivalent of UAH 22.2
bln) 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 3M USD-denominated bonds.
Almost 90% of UAH auction receipts came from the
placement of bonds with maturity of 1.5Y and less. MinFin satisfied 18 out of
19 bids for 1Y bonds for UAH 5.8 bln with a weighted average interest rate of
11.70% (vs. 11.62% for these bonds last week). In addition, all 17 bidders were
successful in purchasing 3M bonds for UAH 5.2 bln at 10.0%. The sale of 18M
bonds to 17 out of 19 bidders at 11.75% brought UAH 991 mln. On top of that,
MinFin satisfied 16 out of 21 bids for 4M bonds at 10.75% for UAH 859 mln.
The rest of the UAH auction receipts came from the
placement of 2Y bonds (UAH 653 mln at 11.85%), 3Y bonds (UAH 611 mln at 12.0%),
3.5Y bonds (UAH 104 mln at 12.15%) and 4Y bonds (UAH 325 mln at 12.25%).
MinFin satisfied 12 bids for USD bonds at 2.9%,
leaving out one bid for 3.4%.
Evgeniya Akhtyrko: The results
of the last local bond auction in 2020 were very similar to those of the prior week. To draw
higher receipts, MinFin added the offer of 3M USD denominated bonds, which was
not in the initial plan.
With the latest auction results, December has become the
most fruitful month for placing Ukraine’s local bonds. In December alone, the
net placement of the bonds amounted to UAH 93.9 bln in equivalent, which is
much more than MinFin was able to raise in 11M20 (net UAH 56.6 bln) and even in
the fruitful year of 2019 (net UAH 83.9 bln).
As with recent auctions, the placements are skewed
towards short-term bonds. Out of a gross placement of UAH 116 bln in December,
82% of the bonds will mature in 2021. And this indicates that the confidence of
market participants is not much improving.
