Ukraine raises UAH 6.6 bln from local bonds

Ukraine’s Finance Ministry raised EUR 201.3 mln and
UAH 1.0 bln (the equivalent of UAH 6.6 bln) at its weekly bond auction on March
3 after drawing UAH 1.5 bln at the auction last week.
The auction receipts came from the placement of 9M EUR-denominated bonds and 6M
UAH-denominated bonds.

MinFin satisfied 17 out of 25 bids for 9M
EUR-denominated bonds for EUR 201.3 mln with a weighted average interest rate
of 2.22% (the same rate as for 6M EUR-denominated bonds placed on Dec. 17).

Five out of eight bidders were successful in buying 6M
UAH-denominated bonds for UAH 1.0 bln with a weighted average interest rate of
9.9% (vs. 9.6% for comparable bonds placed a month ago), while the MinFin’s
cut-off rate was 10.0%.

Evgeniya Akhtyrko: Our
expectation was on the mark that the government might resort to
the placement of local Eurobonds to increase
auction receipts amid dropping demand for UAH-denominated debt. Recall, the
initial MinFin plan for 1Q20 local bond auctions didn’t include the placement
of local Eurobonds.

Despite a noticeable climb in interest rates, the
demand for short-term UAH denominated bonds was relatively low. We expect the
interest rates for UAH-denominated debt to rise above 10% in the next local
bond auctions.