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Concorde Capital Research: MinFin of Ukraine raises USD 59 mln placing 6M local Eurobonds

August 10, 2018 | Cbonds

Ukraine’s Finance Ministry raised USD 59.1 mln from the sale of 6M USD-denominated bonds and UAH 959.3 mln from 3M UAH-denominated bonds (a total of UAH 2.6 bln in the equivalent) at an unscheduled auction held on Aug. 9 after raising the equivalent of UAH 10.0 bln at its Aug. 7 auction. As in the previous week, the government held two auctions this week instead of the typical one weekly auction as it sought to raise more funds.

Thursday's results indicated that demand for new government debt was relatively weak. MinFin satisfied five out of six bids for 6M local Eurobonds at 5.95% (vs. 5.89% on Aug. 7). MinFin rejected two bids for 3M local Eurobonds. Three-month UAH-denominated bonds were sold to two bidders at 18.00%.

Evgeniya Akhtyrko: The main goal of this auction was the placement of USD-denominated bonds. In line with our expectations, the government is trying to to raise more foreign currency with the sale of local Eurobonds in order to offset the losses of gross international reserves during August amid high repayments on FCY-denominated debt. However, Thursday's auction results indicate that the local markets don't have much foreign currency to provide the government with.

At the next auction scheduled for Aug. 14, the government will make another attempt to collect some foreign currency on the domestic market by offering four types of local Eurobonds with maturity ranging from three months to two years. We expect short-term bonds to be in higher demand. Higher interest rates are possible.

Company: Concorde Capital

Full company nameConcorde Capital
Country of riskUkraine
IndustryFinancial institutions

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