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Concorde Capital Research: Ukraine raises UAH 9.7 bln from local bond sale

January 16, 2019 | Cbonds

Ukraine’s Finance Ministry raised UAH 5.6 bln, USD 142.5 mln, and EUR 4.0 mln (a total of UAH 9.7 bln in the equivalent) at its weekly bond auction on Jan. 15 after raising the equivalent of UAH 0.07 bln at the auction last week.

About half of the UAH auction receipts – UAH 2.7 bln – came from the sale of local currency bonds maturing in 77 days. The government satisfied 24 out of 34 bids with interest rates ranging from 19.0% to 19.5%, with a weighted average interest rate of 19.2%. The second highest UAH receipts – UAH 1.9 bln – were received from the sale of 1Y bonds to five out of nine bidders at 18.5%. Ten bidders purchased 6M bonds for UAH 1.0 bln at 19.00%. In addition, 8M bonds were sold to eight bidders for UAH 28.4 mln at 18.5%, while five bidders bought 2Y bonds for UAH 24.2 mln at 18.25%.

The government satisfied all bids for USD- and EUR-denominated local bonds. The highest USD receipts – USD 137.6 mln – came from the sale of 3M bonds to ten bidders with a weighted average interest rate of 6.47%. Eight bidders bought 1Y bonds for USD 3.5 mln at 7.25%. The rest of the USD auction receipts came from the sale of 6M bonds to seven bidders at 6.7%.

Three auction bidders purchased 5M EUR-denominated bonds for EUR 4.0 bln at a weighted average interest rate of 4.52%.

Evgeniya Akhtyrko: MinFin is desperate to raise foreign currency in order to deal with high repayments in local Eurobonds. On Jan. 16, the government is scheduled to repay USD 423.7 mln local Eurobonds placed in December during the year-end rush.

MinFin’s plans to offer local Eurobonds at two more weekly auctions in January. The holders of local Eurobonds are likely to roll over their bond receipts from Jan. 16 by buying local Eurobonds at these auctions.

The local UAH curve remains clearly inverted. The bonds with the shortest maturity terms are in highest demand due to increasing political risks related to the upcoming presidential elections.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine

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