UAH sovereign debt yields stay low

At a primary sovereign bond auction yesterday, Ukraine’s Finance Ministry attracted UAH 223.7 mln (USD 28 mln) via UAH bond placements, close to three times last week’s volume, although still well below the average volume of about UAH 700-800 mln in the previous months. Mykyta Mykhaylychenko: As the government has enough cash to cover its near term needs, it has continued to satisfy only the best bids, while overall bid ranges indicate that yields are staying at low levels. Of the total amount, 60% was attracted through paper with less than a year maturity: the 5M average yield was 6.75% (unchanged from two weeks ago), 9M – 7.93% (slightly below the 8% of two weeks ago). As the bid yields for 2.5Y bonds came in the range of 11.25%-13.5% (up from 11%-12.4% two weeks ago), the Finance Ministry ignored them. At the same time, the government satisfied two bids (total value of UAH 90 mln) for 4Y bonds at 10%, which we do not treat as purely market yields.