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Concorde Capital Research: MinFin of Ukraine raises UAH 1.8 bln from local bond sale

October 24, 2018 | Cbonds

Ukraine’s Finance Ministry raised UAH 86.8 mln, USD 34.3 and EUR 24.6 mln (a total of UAH 1.8 bln in the equivalent) at an Oct. 23 auction after raising the equivalent of UAH 7.9 bln at two auctions last week.

The highest auction receipts – USD 32.6 mln – came from the sale of 8M Eurobonds, which were sold to 16 bidders at 7.0%. The rest of USD auction receipts came from the sale of 2Y Eurobonds at 7.5% to ten bidders. The government satisfied nine out of ten bids for 8M euro-denominated bonds for EUR 19.2 mln at 4.6% (the same rate as at an Oct. 10 auction). On top of that, two bidders bought 1Y Eurobonds for EUR 5.4 mln at 4.07%.

The government satisfied all bids for UAH-denominated local bonds. Eight bidders bought 3M bonds for UAH 67.3 mln at 19.0%. The 6M, 9M and 18M bonds were sold at a unified interest rate of 18.0%. Three bidders bought 6M bonds for UAH 5.6 mln, two bidders bought 9M bonds for UAH 4.0 mln, and two bidders bought 18M bonds for 10.0 mln. The market revealed no demand for 3Y local demand offered at the auction.

Evgeniya Akhtyrko: During the October auctions so far, MinFin has attracted USD 697 mln and EUR 55 mln from local Eurobond placements. This amount should be just enough to refinance October repayments on local Eurobonds of USD 501 mln and EUR 210 mln.

By doing this, the government managed to avoid another shameful drop in gross international reserves, which have been continuously decreasing since May. Recall, since the beginning of the year, Ukraine’s international reserves have lost USD 2.2 bln and dropped below the threshold of three months of imports in August. MinFin had to raise interest rates in order to entice the market towards buying its new local Eurobond issues.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine

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