Ukraine places local Eurobonds for USD 158 mln at 5.3% rate
26 July 2017
Ukraine’s Finance Ministry reported on July 25 it
raised USD 157.9 mln from the placement of two-year USD-denominated local bonds
at an average yield of 5.34%. The ministry received 34 bids for a total value
of USD 463 mln and a rate of up to 5.50%, of which it accepted 30 bids.
At the previous dollar bond auction in May, MinFin
placed three-year bonds for USD 38.1 bln at a rate of 5.49%.
Alexander Paraschiy: Ukraine will definitely use the raised funds to partially cover a debt
payment under its previous IMF standby program, with about USD 360 mln due next
week. Interestingly, the yield of recently placed local bond has nearly
converged to the curve of international Eurobonds (the negative spread is 28
bps compared to about 87 bps in May), even though the default risk of the local
bonds seems to be lower. This, as well as the relatively low average dollar
deposit rate of local banks (about 3.8% in July), creates the possibility for a
further decrease in the yield of local USD-denominated bonds in the future.
