Yesterday the Finance Ministry held its first UAH debt auction of the year and attracted UAH 168 mln (USD 21 mln) through the placement of 6M and 7.5M papers, although the total bid volume amounted to UAH 1.6 bln. Of the total amount, 43% was attracted through 6M papers at a yield of 7% (up from 6.4%-6.8% in October-November when bids for such papers were accepted the last times) although the worse bids in came at 10%. The rest was raised through 7.5M bonds at an average yield of 7.9% (up from 7% in October) with bids ranging from 7.75% to 10.25%. The government rejected all bids for 2Y papers, which in came at 10.1%-13.0% yields. Mykyta Mykhaylychenko: After receiving USD 1 bln from the IMF and a USD 0.5 bln Eurobond placement in December, the government looks like it has enough liquidity now to meet its closest debt obligations: repayment of UAH 1.1 bln (USD 138 mln) in UAH bonds today and UAH 2.4 bln (USD 306 mln) by the end of the month. However, the delay in the privatization of Ukrtelecom (due to bring in more than UAH 10 bln) worsened government’s the liquidity position as it is scheduled to repay UAH 6.1 bln in local bonds in February-March and USD 600 mln (UAH 4.8 bln) in sovereign Eurobonds in March. Hence, we expect the Finance Ministry to continue tapping the local debt market more actively in the weeks to come with yields to probably going up somewhat.