Ukraine raises UAH 4 bln from local bond auction

Ukraine’s Finance Ministry raised UAH 2.5 bln and USD
57.6 mln (a total of UAH 4.0 bln in the equivalent) at its weekly bond auction
on May 14 after raising a total of UAH 10.9 bln (in the equivalent) at the auction last week. MinFin
placed five types of UAH-denominated bonds with maturity ranging from four
months to three years, and 1Y USD-denominated bonds.

The government satisfied all bids for UAH-denominated
bonds. The highest UAH receipts – UAH 773.9 mln – were raised from the sale of
6M bonds to ten bidders with a weighted average interest rate of 18.40%. In
addition, 16 bidders bought 1Y bonds for UAH 677.3 mln with a weighted average
interest rate of 18.39%. Nine bidders bought 2Y bonds for UAH 499.5 mln with a
weighted average interest rate of 17.81%. The rest of auction receipts came
from the sale of 4M bonds to 22 bidders for UAH 417.8 mln at 18.37% and 3Y
bonds to three bidders for UAH 90 mln at 17.0%.

MinFin satisfied 20 bids for 1Y USD-denominated bonds
at 7.25%, rejecting one bid for 7.50%.

Evgeniya Akhtyrko: The demand for local bonds significantly declined from previous week.
Keeping the same cut-off rate of 18.5% for UAH-denominated bonds with terms of maturity
of up to one year, the government is trying to shift the demand of market
participants to 6M and 1Y bonds instead of 3M or 4M bonds. We need to observe
the results of some more auctions to conclude whether or not the interest of
market participants in buying local debt has declined.