MinFin weekly local bond receipts drop to 2.5 bln

Ukraine’s Finance Ministry raised UAH 1.7 bln and USD
31 mln (UAH 2.5 bln in the equivalent) at its weekly bond auction on Aug. 18.
That’s compared to UAH 10.1 bln (in the equivalent) raised at the auction last
week. The auction receipts came from the placement of 6M,
2Y UAH-denominated bonds and 8M USD-denominated bonds.

Around 40% of the auction’s receipts – UAH 1.0 bln –
came from the sale of 6M bonds to one out of two bidders at 7.82% (vs. 7.74%
for these bonds two weeks ago). In addition, ten out of 12 bidders were
successful in purchasing 2Y bonds for UAH 0.7 bln at a weighted average
interest rate of 10.14% (vs. 10.0% for 2.5Y bonds last week)

The USD-denominated bonds were sold to 23 out of 26
bidders at 3.39%.

Evgeniya Akhtyrko: It looks
like the summer vacation season has brought lethargy to the local bond market.
The number of bidders for 2Y UAH-denominated bonds was high, but the volume of
purchased bonds was not impressive. The government had to hike the interest
rate for short-term bonds as even “special buyers” (supposedly state-owned
banks that are usually tapped for purchasing local debt in lean times)
apparently didn’t agree to buy them at lower rates.

Next week, MinFin is scheduled to place 3M, 1Y, 3Y
and 4Y UAH-denominated bonds and 1.2Y USD-denominated bonds. A further increase
in interest rates for short-term bonds is likely.