Ukraine raises UAH 1.3 bln from local bonds, lowers interest rates

Ukraine’s Finance Ministry raised UAH 1.3 bln from the
sale of its local bonds at its weekly bond auction on Nov. 19 after drawing UAH
3.4 bln and USD 0.3 bln at the auction last week. The auction receipts came
from the placement of 3M, 1Y and 2Y bonds.

The highest auction receipts – UAH 665 mln – came from
the sale of 2Y bonds to nine out of 11 bidders with a weighted average interest
rate of 13.50% (vs. 14.64% for the same bonds three weeks ago). In addition,
the government satisfied all five bids for 1Y bonds for UAH 526 mln with a
weighted average interest rate of 13.46% (vs. 13.74% for the same bonds last
week).

On top of that, three out of five bidders were
successful in buying 3M bonds for UAH 127 mln with a weighted average interest
rate of 13.95% (vs. 14.35% for the same bonds two weeks ago).

Evgeniya Akhtyrko: As we
expected, auction receipts dropped as the most demanded bonds with terms of
maturity of three years and more were not offered. Meanwhile, interest rates
continued to plummet even amid a lower number of bids.

Next week, MinFin plans to offer 6M, 1Y and 4Y
UAH-denominated local bonds. The receipts are likely to jump, driven by high
demand for 4Y bonds. The decline of interest rates is likely to continue.