Ukraine raises UAH 3.5 bln from local bond sale

Ukraine’s Finance Ministry raised UAH 3.2 bln, USD 4.2
mln and EUR 5.4 mln (a total of UAH 3.5 bln in the equivalent) at its weekly
bond auction on March 12 after raising UAH 5.5 bln and USD 7.9 mln (a total of
UAH 5.7 bln in the equivalent) at the auction last week.
The government placed five types of UAH-denominated bonds with terms of
maturity ranging from four months to two years, 2Y USD-denominated bonds and 9M
EUR-denominated bonds.

Half of the UAH auction receipts – UAH 1.6 bln – came
form the sale of 2Y bonds to nine bidders at 18.0%. Thirteen bidders bought 4M
bonds for UAH 1.3 bln at 19.5%. In addition, the government satisfied four bids
for 1Y bonds for UAH 238 mln at 18.5%, seven bids for 4M bonds for UAH 33 mln
and eight bids for 6M bonds for 54 mln with the same interest rate of 19.0%.
The government left unsatisfied two bids for 9M bonds, apparently finding the
asked interest rate of 19.0% too high.

The government satisfied all 20 bids for
USD-denominated bonds at 7.5% and four bids for EUR-denominated bonds at 4.6%.

Evgeniya Akhtyrko: The demand
for UAH-denominated bonds declined from the previous week. However, the bidders
revealed they are most interested in bonds with the highest term of maturity.
This is likely to indicate that market participants expect the central bank to
lower its key policy rate at the monetary policy committee’s meeting on March
14, and MinFin will lower interest rates on the primary bond market afterwards.