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Concorde Capital Research: Ukraine local Eurobond rates slide at primary placement

November 21, 2018 | Cbonds

Ukraine's Finance Ministry sold 7M, 12M and 14M USD-denominated local bonds for USD 40.6 mln at its weekly auction held on Nov. 20. MinFin also placed 3M, 6M and 10M UAH-denominated bonds at a total amount of UAH 182.6 mln, bringing total auction receipts to UAH 1.3 bln (in the equivalent).

Seven-month USD-denominated bonds, which were in highest demand, brought in USD 27.5 mln. The government satisfied five out of six bids at an interest rate of 6.70%, down from 7.0% at the previous placement of the same bond on Oct. 30. One-year USD bonds were sold to eight bidders out of ten at 7.25% (vs. 7.22% a week ago) for USD 11.0 mln. The government also satisfied 13 out of 14 bids for 14M local Eurobonds at a weighted average interest rate of 7.43% (vs. 7.50% on Nov. 6) for USD 2.1 mln.

Interest rates for UAH-denominated local bonds didn’t change. The government satisfied all seven bids for 3M bonds at 19.0% for UAH 173.8 mln. Two auction participants bought 6M bonds for UAH 0.8 mln at 18.5%. MinFin satisfied all five bids for 10M bonds at 18.5% for UAH 7.9 mln. One bid for 6M bonds and one bid for 3Y bonds at 19.0% were left unsatisfied.

Evgeniya Akhtyrko: Due to the recent placement of international Eurobonds for USD 2 bln, the government doesn’t have urgent needs for foreign currency. Therefore, it is trying to lower the cost of local debt in foreign currency. By the year end, MinFin plans to hold two more auctions (Dec. 4 and 11) where local Eurobonds will be offered.

Company: Concorde Capital

Full company nameConcorde Capital
Country of riskUkraine
IndustryFinancial institutions

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