MinFin raises UAH 2 bln from local bonds
Ukraine’s Finance Ministry raised UAH 2.0 bln at its weekly bond auction on Aug. 13 after raising UAH 2.7 bln at the auction last week. MinFin offered 6M, 12M and 28M bonds.
Almost three-quarters of auction receipts – UAH 1.4 bln – came from the sale of 28M bonds to 19 out of 20 bidders with a weighted average interest rate of 16.43% (vs. 16.42% for the same bond two weeks ago). In addition, 16 out of 18 bidders were successful in buying 12M bonds for UAH 462 mln with a weighted average interest rate of 16.16% (vs. 16.22% last week). On top of that, UAH 87 mln came from the sale of 6M bonds to 14 out of 15 bidders with an average weighted interest rate of 16.47% (vs. 16.41% two weeks ago).
Evgeniya Akhtyrko: It looks like the traditional August lull came to Ukraine’s local bond market. MinFin satisfied almost all bids, which means that current bidder demand is almost equal to the current government needs in financing budget deficit.
The decline of the rate for 12M bonds wasn’t a big achievement given the relatively low volume. Meanwhile, the interest rate for the most popular 28M bonds didn’t change from the previous placement.
We expect the activity at the primary bond market to be relatively low through the end of this month. The downward movement of interest rates is likely to pause for a moment.