MinFin raises UAH 5.7 bln from local bond sale

Ukraine’s Finance Ministry raised UAH 5.5 bln and USD
7.9 mln (a total of UAH 5.7 bln in the equivalent) at its weekly bond auction
on March 5 after raising UAH 1.1 bln and USD 136 mln (a total of UAH 4.7 bln in
the equivalent) at the auction last week. The
government placed seven types of UAH-denominated bonds with terms of maturity
ranging from three months to three years, while all USD receipts came from the
placement of 1Y bond.

The 9M bond drew the highest UAH auction receipts at
UAH 1.8 bln, acquired by two bidders at 18.5%. The government declined one bid
at 19.0%. The second-highest receipts were drawn by 3M bonds, with UAH 1.7 bln
acquired by 15 bidders at 19.5%. Four bidders bought 7M bonds for UAH 949 mln
and 15 bidders bought 6M bonds for UAH 142 mln, both at 19.0%. Five bidders
bought 18M bonds for UAH 205 mln with a weighted average interest rate of
18.07%.

The government also raised UAH 679.3 mln by selling 2Y
bonds to six bidders at 18.0%. The government declined two bids for 3Y bonds
but satisfied the other two at 17.25%, receiving only UAH 2.5 mln.

MinFin satisfied 22 bids for 1Y USD-denominated bonds
at 7.25%, leaving unsatisfied one bid at 7.75%

Evgeniya Akhtyrko: Demand for UAH-denominated government bonds surged as market
participants revealed their higher interest for bonds maturing at the end of
the current year, while at previous auctions 3M bonds were in highest demand.
This trend is likely driven by the expectation that the National Bank of
Ukraine will lower its key policy rate at the monetary policy committee’s
meeting on March 14. Should this happen, MinFin is likely to lower interest
rates for UAH-denominated bonds.