MinFin raises UAH 9 bln at local bond auction

13 January 2021

Ukraine’s Finance Ministry raised UAH 7.6 bln and USD 48 mln (the total equivalent of UAH 8.9 bln) at its weekly bond auction on Jan. 12 after raising UAH 8.7 bln at the auction last week. The auction receipts came from the placement of 6M, 1Y, 2Y and 3Y UAH-denominated bonds, as well as 1Y USD-denominated bonds.

 

Around 90% of UAH auction receipts came from the placement of 6M and 1Y bonds. MinFin satisfied 37 out of 43 bids for 1Y bonds for UAH 4.7 bln with a weighted average interest rate of 11.69% (vs. 11.67% for these bonds a week ago).  All 24 bidders were successful in purchasing 6M bonds for UAH 2.4 bln with a weighted average interest rate of 10.73% (vs. 10.75% for these bonds two weeks ago).

 

The interest rates for 2Y and 3Y UAH-denominated bonds didn’t change from the previous week. Nine bidders purchased 3Y bonds for UAH 271 mln at 12.15%, and six bidders bought 2Y bonds for UAH 263 mln at 11.85%.

 

MinFin satisfied all 29 bids for 1Y USD-denominated bonds at 3.8%, raising USD 48 mln.

 

Evgeniya Akhtyrko: As with the prior week's auction, the lion's share of UAH auction receipts came from bonds with terms of maturity of one year and less. The demand for USD-denominated bonds was relatively low. And this is a bit surprising, as the market players apparently didn’t rush to roll over the USD 187 mln in receipts from the redemption of USD-denominated bonds on Jan. 6.

 

Next week, MinFin plans to offer five types of UAH-denominated bonds with maturity ranging from three months to six years. We don’t expect any significant changes either in interest rates, or the market’s skew towards bonds with the lowest maturity.

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