Ukraine places local Eurobonds for USD 272 mln, rates rise

The Ukrainian
Finance Ministry sold 18M, 21M and 2Y USD-denominated local Eurobonds for USD
272.3 mln at its weekly bond auction held on May 22. MinFin also placed 3M and 3Y UAH-denominated bonds at a total
amount of UAH 164.8 mln, bringing total auction receipts to UAH 7.3 bln (in
equivalent).

Two-year
USD-denominated bonds, which were in highest demand, brought in USD 113.1 mln.
The government satisfied all nine bids at a weighted average interest rate of
5.63%, up from 5.40% at the previous placement of comparable
bond on March 27. The
USD bonds maturing in 21 months were bought by three bidders for USD 101.3 mln
at 5.60%. The 18M local Eurobonds were placed at 5.32% for USD 57.9 mln.

The interest rate
for the shortest UAH-denominated 3M bonds remains the highest – 17.41%.
Meanwhile, the interest rate for 3Y bonds declined to 16.10% from 16.15% two weeks ago.
Auction receipts in the national currency broke almost even between them.

Evgeniya Akhtyrko: Like one month ago, MinFin digressed from its initial
plans by deciding to place FCY-denominated bonds while the initial auction
schedule assumed the placement of 3M, 6M, 9M, 1Y and 3Y UAH-denominated bonds.
With this move, the government is apparently trying to compensate an expected
plunge in gross international reserves during the month.

Meanwhile, the
increase in interest rates for USD-denominated bonds implies that the process
of attracting FCY resources on the local market is becoming more difficult.
This is yet another sign pointing to Ukraine’s urgent need in securing the next
IMF tranche to handle foreign debt repayments in 2019.