Ukraine places USD 89 mln in local 2Y Eurobonds at 5.4% rate

Ukraine’s Finance Ministry reported on Nov. 21 it raised
USD 88.9 mln from the placement of local USD-denominated bonds at an average
yield of 5.40%. The bonds mature in February 2020. The ministry accepted all
the 15 bids at the auction. The placement rate was the same as the two previous
auctions convened in October and August, when MinFin raised USD 170 mln and USD
351 mln respectively. The next placement of USD-denominated local bonds is
scheduled for Dec. 19.

Alexander Paraschiy: Most likely, yesterday’s placement was aimed at accumulating foreign
currency to repay USD 271 mln in local Eurobonds due today. If so, the goal has
not been reached. Taking into account the recent local bond placement and hard
currency debt repayments in November (including an IMF payment), the government
will have hard currency outflow of over USD 600 mln this month, which will
affect negatively the country’s gross reserves. With such a trend, it looks
like our end-2017 Ukraine gross reserves forecast of USD 18.0 bln is too optimistic.