Ukraine MinFin successfully places 6Y local bonds

12 June 2019

Ukraine’s Finance Ministry raised UAH 6.5 bln and USD 4.4 mln (a total of UAH 6.6 bln in the equivalent) at its weekly bond auction on June 11 after raising a total of UAH 8.4 bln (in the equivalent) at the auction last week. MinFin placed five types of UAH-denominated bonds with maturity ranging from three months to six years and two types of USD-denominated bonds maturing in 2020.

 

Half of the UAH auction receipts – UAH 3.4 bln – came from the debut placement of 6Y bonds with a weighted average interest rate of 15.84%. MinFin satisfied eight out of 11 bids, setting the cut-off rate at 15.85%. Finance Minister Oksana Markarova said on her Facebook page afterwards on June 11 that the bond issue was mostly bought by non-residents.

 

MinFin satisfied all 11 bids for 2Y bonds at 17.95% for UAH 1.4 bln. The interest rates for bonds with a term of maturity of up to one year declined slightly. The government also satisfied five out of nine bids for 1Y bonds for UAH 0.7 bln at 18.45% (vs. 18.50% a week ago). MinFin satisfied all ten bids for 3M bonds with a weighted average interest rate of 17.95% (vs. 18.0% last week) for UAH 0.5 bln. The sale of 6M bonds to eight out of 14 bidders with a weighted average interest rate of 18.36% (vs. 18.47% last week) also brought in UAH 0.5 bln.

 

The lion’s share of the auction’s USD receipts – USD 3.7 mln – were raised by the sale of 10M bonds to 14 bidders at 7.25%. MinFin also satisfied eight out of ten bids for 17M bonds for USD 0.7 mln at 7.25%.

 

Evgeniya Akhtyrko: The successful debut placement of 6Y bonds, with high demand from non-resident buyers, is indeed a positive achievement. It points to increased confidence of investors in Ukraine’s debt market, as well as improved expectations regarding the stability of Ukraine’s national currency.

 

Meanwhile, the demand for local Eurobonds was weak. Next week, MinFin is likely to increase its efforts to collect receipts from the placement of local Eurobonds, given the planned redemption of Eurobonds for 489 mln on June 19.

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