MinFin weekly local bond receipts jump to UAH 6 bln

16 September 2020

Ukraine’s Finance Ministry raised UAH 2.9 bln and USD 112 mln at its weekly bond auction on Sept. 15, compared to UAH 1.0 bln at the auction last week. The auction receipts came from the placement of 8M and 2Y UAH-denominated bonds and 1Y USD-denominated bonds.

 

Around 70% of the UAH auction receipts – UAH 2.0 bln – came from the sale of 8M bonds to two out of four bidders at 7.82%. MinFin also satisfied six out of seven bids for 2Y bonds for UAH 894 mln with a weighted average interest rate of 10.43%.

 

The USD-denominated bonds were sold to 28 out of 30 bidders at 3.50% (the same rate as for these bonds placed three weeks ago).

 

Evgeniya Akhtyrko: We were right in our expectations that offering local Eurobonds would help to boost auction receipts. Meanwhile, we see no improvement at the primary market for UAH-denominated bonds. The two buyers of 8M bonds were likely to be state-owned banks, as the interest rates for those bonds were apparently too low to create a competitive demand.

 

Next week, MinFin is scheduled to place 3M, 1Y and 3Y UAH-denominated bonds. The auction receipts are likely to drop again, as we don’t expect MinFin to hike interest rates to a level that corresponds to market expectations.

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