MinFin local bond auction receipts jump to UAH 14 bln

Ukraine’s Finance
Ministry raised UAH 10.1 bln and USD 154 mln (total equivalent of UAH 14.3 bln)
at its weekly bond
auction on March 16 after raising UAH 5.2 bln at the auction last week. The
highest receipts came from the placement of 3M, 12M, 19M, 2Y, 3Y and 6Y
UAH-denominated bonds as well as 1Y USD-denominated bonds.

The largest UAH
receipts – UAH 4.3 bln – came from the sale of 19M bonds to 21 out of 22
bidders with a weighted average interest rate of 11.08% (vs. 10.96% for these
bonds a week ago). MinFin satisfied 36 out of 38 bids for 1Y bonds for UAH 2.9
bln with a weighted average rate of 10.74% (vs. 10.62% for these bonds last
week). The sale of 2Y bonds to 24 out 27 bidders at 11.8% (the same rate as the
last week) brought UAH 1.9 bln.

The weighted
interest rate for 3M bonds declined to 8.33% from 8.47% two weeks ago. The sale
of these bonds to 21 out of 32 bidders brought UAH 529 mln. MinFin satisfied
all 21 bids for 6Y bonds for UAH 236 mln at 12.50% as well as all eight bids
for 3Y bonds for UAH 111 mln at 12.05% (the same rate as a week ago).

One-year
USD-denominated bonds were sold to 77 out of 79 bidders for USD 154 mln at 3.70% (vs. 3.90%
for the same bond five weeks ago).

Evgeniya Akhtyrko: MinFin hiked interest rates for the
most popular 1Y and 1.5Y bonds in order to increase auction receipts. The
interest rates for 3Y and 6Y bonds stay high, but this doesn’t help to increase
the demand for these bonds. MinFin is trying to minimize the demand for the
bonds maturing in 2021 by pushing down interest rates for them.

The demand for 1Y
local Eurobonds wasn’t stellar. However, the USD receipts of the latest
auction, USD 163 mln raised at the auction two weeks ago, as well expected
receipts from the planned placement of USD-denominated bonds on March 31 should
be enough to rollover the redemption of local Eurobonds for USD 325 on March
31.

Next week, MinFin plans to offer 6M, 1Y, 1.5Y, 2Y and 3Y bonds. The
auction receipts are likely to bring UAH 9-11 bln.