MinFin raises UAH 6 bln at the local bond auction

Ukraine’s Finance Ministry raised UAH 6.0 bln at its
weekly bond auction on May 25 after raising UAH 14.2 bln (in the equivalent) at
the auction a week ago. The auction receipts came from the placement of 6M,
15M, 18M, 2Y and 3Y bonds.

More than half of all auction receipts – UAH 3.5 bln –
came from the sale of 15M bonds to all 29 bidders at
11.20% (vs. 11.19% for these bonds last week). The second largest receipts –
UAH 1.1 bln – were generated by 14 buyers of 3Y bonds sold at 12.30% (the same
rate for these bonds as two weeks ago).

MinFin accepted 18 out of 19 bids for 2Y bonds for UAH
772 mln at 12.05% (vs. 12.02% for these bonds last week). In addition, all 14
bidders were successful in purchasing 6M bonds for UAH 482 mln with a weighted
average interest rate of 8.98% (vs. 9.00% for these bonds two weeks ago). The
lowest receipts of UAH 97 mln were brought by five bidders for 18M bonds placed
at 11.30% (the same rate for these bonds as last week).

Evgeniya Akhtyrko: The latest
auction brought no intrigue. Apparently, the participants were aware of
MinFin’s intention to make no move in interest rates, and practically all their
bids were right to the point. Any government attempts to cut interest rates are
likely to result in lower demand for local debt.

Next week, MinFin plans to offer five types of UAH
denominated bonds with maturity ranging from three months to three years as
well as 1Y and 2Y USD denominated bonds. The auction receipts are likely to go
up, driven by additional receipts from local Eurobonds.