MinFin bond auction receipts plummet to UAH 0.4 bln
28 October 2020
Ukraine’s Finance Ministry raised UAH 0.4 bln at its
weekly bond auction on Oct. 27, compared to UAH 7.2 bln (in the
equivalent) at the auction last week. The auction
receipts came from the placement of 1Y bonds only, while MinFin’s plan for this
day also included 6M, 2Y and 4Y bonds.
MinFin satisfied six out of 12 bids for 1Y bonds for
UAH 396 mln at 10.30% (vs. 10.22% for these bonds a week ago). There were six
bidders ready to buy 4Y bonds with interest rates ranging from 11.4% to 12.5%,
but all of them were left unsatisfied. Apparently, bidders revealed no interest
in the primary placement of 6M and 2Y bonds.
Evgeniya
Akhtyrko: The situation at the primary bond market is
devastating. Apparently, some buyers of local debt increased their activity on
the secondary market, purchasing bonds of previous issues at higher interest
rates. The supply at the secondary market is generated by non-resident holders
willing to get rid of UAH-denominated debt amid possibly increased country
risks.
There is no other way to revive the primary bond
market other than hiking interest rates for UAH-denominated bonds. Next week,
MinFin plans to offer 6M, 1Y, 2Y and 4Y UAH-denominated bonds, as well as 1Y
EUR-denominated bonds. The auction receipts are likely to jump as offers of
local Eurobonds usually find demand at the market.
