MinFin raises UAH 9 bln at local bond auction

Ukraine’s Finance Ministry raised UAH 7.6 bln and USD
48 mln (the total equivalent of UAH 8.9 bln) at its weekly bond auction on Jan.
12 after raising UAH 8.7 bln at the auction last week. The auction receipts
came from the placement of 6M, 1Y, 2Y and 3Y UAH-denominated bonds, as well as
1Y USD-denominated bonds.

Around 90% of UAH auction receipts came from the
placement of 6M and 1Y bonds. MinFin satisfied 37 out of 43 bids for 1Y bonds
for UAH 4.7 bln with a weighted average interest rate of 11.69% (vs. 11.67% for
these bonds a week ago).  All 24 bidders were successful in purchasing 6M
bonds for UAH 2.4 bln with a weighted average interest rate of 10.73% (vs.
10.75% for these bonds two weeks ago).

The interest rates for 2Y and 3Y UAH-denominated bonds
didn’t change from the previous week. Nine bidders purchased 3Y bonds for UAH
271 mln at 12.15%, and six bidders bought 2Y bonds for UAH 263 mln at 11.85%.

MinFin satisfied all 29 bids for 1Y USD-denominated
bonds at 3.8%, raising USD 48 mln.

Evgeniya Akhtyrko: As with the
prior week’s auction, the lion’s share of UAH auction receipts came from bonds
with terms of maturity of one year and less. The demand for USD-denominated
bonds was relatively low. And this is a bit surprising, as the market players
apparently didn’t rush to roll over the USD 187 mln in receipts from the
redemption of USD-denominated bonds on Jan. 6.

Next week, MinFin plans to offer five types of
UAH-denominated bonds with maturity ranging from three months to six years. We
don’t expect any significant changes either in interest rates, or the market’s
skew towards bonds with the lowest maturity.