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Concorde Capital Research: MinFin of Ukraine raises USD 41 mln from local bond sale

October 17, 2018 | Cbonds

Ukraine’s Finance Ministry raised USD 41.3 mln and UAH 7.1 mln (a total of UAH 1.2 bln in the equivalent) at an Oct. 16 auction after raising the equivalent of UAH 11.0 bln last week.

The government satisfied all six bids for USD-denominated bonds maturing in Jan.’20, two bids for May’20 bonds and all seven bids for Oct.’20 at a unified interest rate of 7.5%. Meanwhile, June’19 local Eurobonds were sold to eight out of ten bidders at 7.0%. Around 60% of USD auction receipts, or USD 25.3 mln, came from the sale of Oct.’20 bonds. Receipts from the sale of June’19 local Eurobonds amounted to USD 8.3 mln. The rest of USD receipts – USD 7.6 mln and USD 0.1 mln – came from Jan.’20 and May’20 bonds, respectively.

UAH 7.1 mln in auction receipts came from the sale of 3M UAH-denominated bonds, satisfying six out of eight bids at 19.0%. The government refused to satisfy two bids for 2Y UAH-denominated bonds at 18.00% and 17.75%, apparently finding those interest rates too high.

Evgeniya Akhtyrko: In buying up local Eurobonds and largely ignoring UAH debt, bond market participants eagerly responded to the government's need for foreign currency, as reflected by the high interest rates it was willing to accept. These needs are especially high currently as a USD 501 mln redemption of local Eurobonds is scheduled for today, and another EUR 208 mln in local Eurobonds is due next week. Since the beginning of October, MinFin has attracted USD 411 mln and EUR 30 mln from local bond placements. Next week, it will offer 9M and 12M bonds denominated in euro, according to its schedule. Apparently, its goal is to fully refinance these October repayments, and it’s likely that MinFin more or less will fulfill its plan.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine


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