MinFin raises UAH 3.7 bln on debut placement of 7Y local bonds

Ukraine’s Finance Ministry raised UAH 6.3 bln at its
weekly bond auction on Jan. 28 after drawing the same amount at the auction last week.
The auction receipts came from the placement of 3M, 14M, 2Y and 7Y bonds.

Around a half of auction receipts – UAH 3.7 bln – came
from the debut placement of 7Y bonds, which were sold to 44 out of 73 bidders
with a weighted average interest rate of 9.79%. The bidding interest rates
ranged from 9.0% to 12.10%, while the MinFin’s cut-off rate was 9.95%.

The second highest receipts – UAH 1.1 bln – came from
the sale of 14M bonds to 12 out of 13 bidders with a weighted average interest
rate of 9.91% (vs. 10.04% for the same bonds last week). In addition, MinFin
satisfied 17 out of 20 bids for the purchase of 2Y bonds for UAH 0.9 bln with a
weighted average interest rate of 9.86% (10.04% for the same bonds two weeks
ago).

On top of that, eight out of 11 bidders were
successful in purchasing 3M bonds for UAH 0.5 bln with a weighted average
interest rate of 10.15% (vs. 10.73% two weeks ago).

Evgeniya Akhtyrko: The debut
placement of Ukraine’s 7Y local bonds was successful. It looks like nonresident
investors remain interested in Ukraine’s local bond market, even despite higher
uncertainty on the global financial markets.

Interest rates continue to decline for the whole
spectrum of Ukraine’s local bonds. We expect the National Bank of Ukraine to
lower its key policy rate by 2.0 – 2.5 pp on Jan. 30 (from 13.5% currently), and
this is likely to prompt a further decline in interest rates.