MinFin raises USD 85 mln placing 6M local Eurobonds

Ukraine’s Finance Ministry raised USD 85.4 mln at an
auction held on Aug. 21 from the sale of 6M USD-denominated bonds and UAH 27.4
mln from 3M and 1Y UAH-denominated bonds, a total of UAH 2.4 bln in the
equivalent. That’s equal to the equivalent of UAH 2.4 bln (USD 50.3 mln and UAH
1 bln) raised last week. The initial MinFin’s auction schedule didn’t assume
the sale of local Eurobonds on Aug. 21.

MinFin satisfied all 16 bids for local Eurobonds at
5.95%, the same interest rate as the last placement on Aug. 14. Meanwhile, the
government rejected four bids for 7M EUR-denominated bonds at the rate of
4.70%, apparently finding the demanded interest rate too high. Recall, 3M
EUR-denominated local bonds were placed at 4.39% two weeks ago.

The demand for UAH-denominated bonds was very weak as
the sale of 3M and 1Y bonds brought UAH 25.3 mln and UAH 2.1 mln, respectively.
The government satisfied all five bids for 3M bonds at 18.00%, and the only bid
for 1Y bonds at 17.9%.

Evgeniya Akhtyrko: With this
auction, the government made one more attempt to raise more foreign currency
with the sale of local Eurobonds in order to offset the losses of gross international reserves
during August amid high repayments on FCY-denominated debt.

At the moment, August receipts from the sale of local
Eurobonds total USD 382.1 mln and EUR 69.0 mln. This amount should cover only
around half of the government’s FCY-denominated debt payments during the month.

The preliminary MinFin auction schedule doesn’t
assume any more local Eurobond sales in August, but the government can make
another attempt next week, digressing from initial plans again. However, FCY
resources on the Ukrainian market for local Eurobonds look to be low.