Ukraine local bond auction receipts jump to UAH 13.5 bln

Ukraine’s Finance Ministry raised UAH 8.1 bln and USD
199 mln (a total of UAH 13.5 bln in the equivalent) at its weekly bond auction
on Apr. 16 after raising total UAH 8.2 bln (in the equivalent) at the auction last week. The
government placed five types of UAH-denominated bonds with maturity ranging
from three months to three years, and 9M and 2Y USD-denominated bonds. In
addition, the government sold 17M USD-denominated puttable bond. The government
satisfied all bids, the auction receipts were the highest since Jan. 29.

A half of all UAH receipts – UAH 4.1 bln – came from
the sale of 3M bonds to 18 bidders at 19.5%. The second highest demand was for
2Y bonds, which were sold to 13 bidders for UAH 3.0 bln at 18.0%. In addition,
12 bidders bought 1Y bonds for UAH 0.6 bln at 18.5%, three bidders bought 3Y
bonds for UAH 0.3 bln, and 12 bidders bought 6M bonds for UAH 0.1 bln at 19.0%.

Around half of USD auction receipts – USD 111.9 mln –
came from the sale of 9M bonds to 12 bidders at 7.25%. USD 13.6 mln came from
the sale of 2Y bonds to 23 bidders with weighted average interest rate of
7.74%. In addition, one bidder bought puttable bond for USD 73.5 mln at 3.85%.
The holder of this bond (which pays coupons semi-annually) has the right to put
it any time before Aug. 13, 2020 with 20 days prior notice. In which case, the
holder will receive the latest accrued coupon at a 0.5% rate.

Evgeniya Akhtyrko: The trends
at the primary market of UAH-denominated bonds hasn’t change since last week.
Notably, the bonds with shortest term of maturity remain the most popular,
while the interest for 2Y and 3Y bonds has not been lost.

The novelty of the latest auction – the sale of
puttable local Eurobonds – was likely a targeted sale to a specified buyer.
This instrument is likely to be the less expensive replacement for 1M local
Eurobonds which were previously placed at 6.25%.