MinFin bond auction receipts drop to UAH 1.4 bln

Ukraine’s Finance Ministry raised UAH 1.4 bln at its weekly
bond auction on Sept. 7 after raising UAH 3.0 bln and USD 130 mln at the
auction last week. The auction receipts came from the placement of 6M, 1Y,
1.5Y, 2Y, 3Y and 5Y denominated bonds. The government hiked the interest rate
for 3Y bonds to 12.45% from 12.40% a week ago.

Around 70% of all auction receipts – UAH 1.0 bln –
came from the sale of 15M bonds to four bidders at 11.30%. The sale of 2Y bonds
to eight out of ten bidders at 12.09% brought UAH 155 mln. MinFin satisfied
five out of six bids for 5Y bonds at 12.59%, receiving UAH 65 mln. In addition,
17 out of 18 bidders were successful in purchasing 1Y bonds for UAH 54 mln at
11.15%.

The sale of 6M bonds to five out of eight bidders with
a weighted average interest rate of 9.73% only brought UAH 34 mln. The smallest
receipts, at UAH 26 mln, came from the sale of 3Y bonds to five bidders at
12.45%.

Evgeniya Akhtyrko: The local bond market remains dormant. The hike of the interest rate
for 3Y bonds didn’t result in a spike in demand. Hopefully, the market players
are waiting for the NBU’s upward revision of the key policy rate on Sept. 9. We
expect the regulator to hike the key policy rate by at least 0.5pp from the
current 8.0%. This should draw bond rates up. Next week, the government is to offer
six types of UAH denominated bonds with maturity ranging from three months to
five years.