MinFin raises UAH 4 bln at local bond auction

Ukraine’s Finance Ministry raised USD 143 mln and UAH
119 mln (the total equivalent of UAH 4.2 bln) at its weekly bond auction on
Jan. 18 after raising UAH 3.9 bln at the auction last week. The auction
receipts came from the placement of 6M and 1Y USD denominated bonds as well as
6M, 1Y, 2Y and 5Y UAH denominated bonds.

More than half of all auction receipts came from the
sale of 6M USD denominated bonds to two bidders for USD 100 mln at 3.50%. In
addition, 18 bidders bought 1Y USD denominated bonds for USD 43 mln at 3.70%.

The largest UAH receipts of UAH 74 mln came from the
sale of 2Y bonds to 14 bidders at 12.95% (vs. 12.94% last week). MinFin
satisfied 12 bids for 1Y bonds for UAH 23 mln at 11.90% (the same rate as a
week ago).  The sale of 6M bonds to four out of five bidders at 10.99%
brought UAH 10.8 mln. Five bidders bought 5Y bonds for UAH 9 mln at 13.25% (the
rate remains unchanged for this bond since late November).

Evgeniya Akhtyrko: The UAH
receipts of the latest auction were negligible. And it’s not likely that the
government would manage to raise more by offering higher interest rates. The geopolitical risks are increasing,
and it’s not a good time for buying government debt even at a higher price.

The most of auction USD receipts was likely the
rollover of local Eurobond redemption for USD 177 mln on Jan. 15. Notably, the
initial auction schedule assumed the sale of only 1Y Eurobonds, but the
government had to add 6M Eurobonds to get a more decent auction result amid the
increased tension.

Next week, the government is to offer six types of UAH
denominated bonds with maturity ranging from three months to four years. The
government receipts are likely to be very low.