21 December 2011
Ukraine’s Finance Ministry held its second auction of local USD-denominated bonds yesterday and raised USD 83 mln: USD 34 mln was in 6-month papers with yields of 8.50-9.00%, USD 23 mln in 9-month papers at 8.30-8.75%, and USD 25 mln in one-year notes at 9.00-9.30% (max yield is in line with the first auction). The Finance Ministry accepted nine bids out of 10. Longer-term papers failed to attract any interest. The government also plans to sell more local Eurobonds today and tomorrow. Vitaliy Vavryshchuk: We maintain our view that the USD-denominated bonds will remain a key tool for the government to attract funding from the local market in the next couple of months. The Finance Ministry is unlikely to raise any meaningful funds by selling standard hryvnya bonds as recent improvement in banking sector liquidity still does not look sustainable.