Ukraine raises more local debt while lowering rates for bonds

Ukraine’s Finance Ministry raised UAH 2.9 bln and USD
170.1 mln (a total of UAH 7.5 bln in the equivalent) from an additional bond
sale on Dec. 27 after raising the equivalent of UAH 0.8 bln at the scheduled auction the day before.

All UAH auction receipts came from bonds maturing in
62 days. MinFin set the cut-off interest rate at 18.5% and left unsatisfied six
out of 16 bids. The resulting weighted average interest rate of 18.19% was
significantly lower than 20.0% set for 90-day bonds sold just a day before.

The government declined nine bids for 3M bonds and
four bids for 6M bonds, as the desired interest rates ranging from 20.0% to
20.5% were apparently too high.

The USD auction receipts were generated by eight
bidders who bought USD-denominated bonds maturing in 20 days at 6.25% (vs.
6.34% for the same bond placed on Dec. 19). MinFin declined three bids with
higher interest rates.

Evgeniya Akhtyrko: As a result of this unscheduled auction, MinFin raised more cash to
secure its fiscal needs in the nearest weeks. This move is understandable as
budget revenues might be bumpy due to the traditional decrease of business
activity during the holiday season lasting through mid-January.