MinFin repays USD 500 mln Eurobond, attracts USD 246 mln in local bonds

The Finance Ministry said yesterday it repaid its USD 500 mln (UKRAIN) Eurobond (matured yesterday) on June 25. The ministry also reported it attracted a total of USD 245.5 mln in local USD-denominated bills (USD 230.7 mln with a 1-year tenor, the rest 2-year bills) at 9.5% yesterday. Auctions for UAH-denominated T-bills took place but there were not any sales. Yesterday’s auction brings the total amount of debt raised by the government on the local market to the equivalent of USD 5.1 bln (ex-UAH 5.2 bln of notes maturing by end-2012), or 67% of the full-year target for domestic borrowings.

Vitaliy Vavryshchuk: As we expected, the NBU’s stimulus revived local demand for foreign-currency bonds. Recall that last week the NBU allowed for accounting for up to 10% of banks’ holdings of FX bonds as part of their obligatory reserves. We expect the government will raise another USD 1.0 bln in FX papers through end-2012.