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ICU Research: MoF of Ukraine preparing for repayments

October 12, 2018 | Cbonds

After a break, the MoF held another unscheduled auction yesterday offering two-month, local-currency bills, and three bills denominated in US dollars with four-month, eight-month, and 16-month maturities. FX reserves were increased in government accounts prior to large repayments scheduled for the next two weeks; however, this auction will not solve all the MoF's FX needs.

Local-currency bills did not see large demand, receiving only tree bids amounting to UAH52m (par value). This demand was fully accepted, as competitive bids were submitted with 19% rates, the same the MoF accepted at recent auction.

For USD-denominated bills, the MoF received larger demand than on Tuesday, with proceeds amounting to US$184m. Most was for the 16-month bills, with par value amounting to US$100m; US$54m of demand was for four-month bills, and rest of demand, US$30m, was for eight-month bills. Some demand was rejected, as acceptance of some bids would have required a significant increase in rates for insufficient proceeds.

As a result, the MoF received US$176m, and increased FX proceeds so far in October to above US$400m. This should allow the Ministry to get through next week's debt repayments without having to fully refinance them. But FX reserves in government accounts remains low, and receiving new FX financing, especially from abroad, remains crucial. Therefore, next week, the Ministry of Finance may raise rates for foreign currency bills, subject to demand, at slightly higher rates than in the first half of October.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine


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