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Concorde Capital Research: MinFin of Ukraine raises UAH 5 bln at unscheduled bond auction

October 16, 2018 | Cbonds

Ukraine’s Finance Ministry raised USD 175.9 mln and UAH 50.6 mln (a total of UAH 5.0 bln in the equivalent) at an unscheduled auction held on Oct. 11 after raising the equivalent of UAH 6.0 bln at its Oct. 9 auction.

The highest auction receipts - USD 101.6 mln - were received from placing USD-denominated bonds maturing in January 2020. The government satisfied three out of four bids while keeping the cut-off interest rate of 7.50%, as at the Oct. 9 auction.

MinFin also sold USD-denominated bonds maturing in January 2019 to five out of nine bidders for USD 49.2 mln at a weighted average interest rate of 5.77%. The rest of USD-denominated auction receipts - USD 25.1 mln - came from the sale of 9M Eurobonds to four out of six bidders at 7.00%.

The UAH-denominated auction receipts came from the sale of 3M bonds to three bidders at 19.00%.

Evgeniya Akhtyrko: By keeping high interest rates of local Eurobonds, the government is trying to force market participants to rollover their bonds maturing in October. Recall, MinFin is scheduled to pay around USD 750 mln on local bond redemptions this month, and the placement of new local Eurobonds is the only way to compensate the related losses of gross international reserves.

Since the beginning of October, the government has raised USD 415.1 mln and EUR 30 mln from Eurobond sales. MinFin plans to sell local Eurobonds at two more auctions (on Oct. 16 and Oct. 23), according to its October schedule. In our view, the government will try to raise another USD 100-200 mln this month, keeping interest rates at current levels.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine

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