MinFin raises UAH 1.1 bln from local bond sale

Ukraine’s Finance Ministry raised UAH 470 mln and USD
20.8 mln (a total of UAH 1.1 bln in the equivalent) at its weekly auction on
Nov. 13 after raising the equivalent of UAH 1.2 bln at its auction last week.

The highest auction receipts – UAH 409 mln – came from
the sale of 3M UAH-denominated bonds, which were sold to 15 bidders at 19.0%.
Eight bidders bought 5M bonds for UAH 53.3 mln at 18.5%. The rest of UAH
auction receipts came from the sale of 10M bonds to one participant (UAH 1.0
mln at 18.5%) and 18M to five participants (UAH 5.8 mln at 18.5%). The
government declined two bids at 19.2% for 3M bonds, one bid at 19.0% for 5M
bonds and two bids at 19.0% for 12M bonds.

The government sold 1Y local Eurobonds to seven
bidders for USD 16.8 mln at a weighted average interest rate of 7.22%, but
declined three bids with interest rates exceeding 7.25%. Two-year local
Eurobonds were sold to nine bidders for USD 4.0 mln at 7.5%, while one bid at
8.0% was declined.

Evgeniya Akhtyrko: The last
two weekly auctions produced similar results in terms of UAH and USD receipts.
Most likely, the current market capacity will not be sufficient to cover
government’s need to refinance local Eurobonds for USD 132.8 mln maturing in
November. However, this shortfall will not have an adverse effect on Ukraine’s
foreign currency reserves, as the recent placement of international
Eurobonds replenished government coffers with foreign currency.

In addition, benefiting from the favorable
situation at Ukraine’s ForEx, the National Bank of Ukraine (NBU) continued
buying foreign currency. In Nov. 5-9, the NBU’s net foreign currency purchases
amounted to USD 157.4 mln.