Ukraine local bond placement receipts jump to UAH 20.3 bln

Ukraine’s Finance Ministry raised UAH 2.7 bln and USD
0.7 bln on March 27 at its weekly local bond auction. Total receipts in the
equivalent of UAH 20.3 bln is the highest amount raised so far this year.
USD-denominated bonds, with a 5.1% interest rate and October 2018 maturity
date, brought in USD 406.3 mln, about half of all auction receipts. The
interest rates for the 1Y (5.3%) and 2Y (5.4%) USD-denominated bonds did not
change since their previous placements in January. They raised USD 179.0 mln
and USD 84.1 mln, respectively.

The interest rate for 9M UAH-denominated bonds
increased to 17.3% from 17.01% in the prior week, drawing the most receipts at
UAH 2.2 bln. Meanwhile, the shortest local bonds, maturing in 70 days, were
placed at 17.33% (compared to 17.44% a week ago) and raised UAH 483.9 mln. The
interest rate for 1Y bonds was unchanged at 17.00% since their last placement
two weeks ago, drawing only UAH 39.7 mln.

Evgeniya Akhtyrko: The relatively high receipts from the sale of FCY-denominated local
bonds will help to make the FCY-denominated debt repayment of USD 1.4 bln
during March, thereby avoiding a drastic hit to Ukraine’s international reserves. Recall, the prior auction on March 20 raised EUR 123.3 mln that will also help to relieve this pressure. It is
also important to note that demand for foreign currency did not move interest
rates higher for USD-denominated local bonds.