Ukraine local bond auction revenue plunges to UAH 185 mln

The weekly local bond auction held by Ukraine’s Finance
Ministry on Apr. 3 raised only UAH 185.3 mln, a fraction
of the UAH 20.3 bln raised last week. The government drastically reduced its
offer of debt securities, pitching only 3M bonds while the preliminary schedule
included the placement of 6M, 1Y and 2Y bonds as well.

The scarce government offer attracted 22 bids, 19 of
which were accepted. The auction cut-off rate was 17.44% while the bidders
requests ranged from 17.0% to 17.5%. The weighted average rate for placed 3M
bonds was 17.33%, the same as for the 70-day bonds placed last week.

Evgeniya Akhtyrko: Apparently, MinFin decided to limit its primary placement to the
shortest bonds in order to prevent the growth of state debt costs, given the
current high interest rates. The abundant bond placement in March auctions,
which raised UAH 29.0 bln, has enabled the government to take a breather from
piling up debt to cover shortages. However, this situation is not likely to
last long, as the results of 1Q18 budget revenue collection point to the
inability of Ukraine’s economy to ensure smooth budget revenue growth.