MinFin raises UAH 8 bln from local bonds

Ukraine’s Finance Ministry raised USD 306 mln and UAH
10.6 mln (UAH 8.3 bln in the equivalent) at its weekly bond auction on July 14
after drawing UAH 0.3 bln  at the auction last week.
The auction receipts came from the placement of 1Y USD-denominated bonds and
3M, 1Y and 3Y UAH bonds.

MinFin satisfied 43 out of 46 bids for 1Y USD-denominated
bonds with a weighted average interest rate of 3.5%.

The government raised UAH 4.6 mln from selling 3Y
bonds to four bidders at 10.00% (vs. 10.47% for these bonds two weeks ago). In
addition, UAH 3.2 mln came from the sale of 3M bonds to four bidders at 7.00%
(vs. 7.24% for these bonds last week). The rest of auction’s UAH receipts – UAH
2.8 mln – came from the sale of 1Y bonds to one out of two bidders at 9.20%
(9.50% for these bonds last week).

Evgeniya Akhtyrko: As we expected,
MinFin managed to improve its receipts at the local debt market by offering
local U.S. dollar bonds. However, it looks like the market players decided to
rollover just less than a half of its U.S. dollars received from the redemption
of 1Y local Eurobonds on July 9.

Meanwhile, the government’s ability to raise UAH debt
at the local market is fading. These receipts at the latest auctions have been
negligent.

As a result, the confidence of the local bond
market has further deteriorated. And we don’t see any other factors behind this
deterioration besides the ever-increasing uncertainty with the National Bank of
Ukraine (NBU) and the threat it can lose its status as an independent institution in the nearest future.