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Concorde Capital Research: Ukraine raises UAH 13.6 bln from local bond sale

January 23, 2019 | Cbonds

Ukraine’s Finance Ministry raised UAH 9.8 bln, USD 108.6 mln, and EUR 23.8 mln (a total of UAH 13.6 bln in the equivalent) at its weekly bond auction on Jan. 22 after raising the equivalent of UAH 9.7 bln at the auction last week. The highest UAH auction receipts – UAH 3.7 bln – came from the sale of 1Y bonds to 11 out of 12 bidders with a weighted average interest rate of 18.49%. MinFin satisfied all 28 bids for 3M bonds with a weighted average interest rate of 19.48%, raising UAH 2.4 bln, and all 21 bids for 6M bonds at 19.00%, raising UAH 2.8 bln. Nine bidders bought 10M bonds for UAH 535 mln at 18.5%. In addition, 2Y bonds were sold to nine bidders for UAH 300 mln at 17.54%, while two bidders bought 3Y bonds for UAH 11 mln at 17.25%.

As in the previous auction, the government satisfied all bids for USD- and EUR-denominated local bonds. Seven bidders bought 3M dollar-denominated bonds for USD 52.4 mln at 6.50% and nine bidders bought 9M bonds for USD 56.3 mln at an interest rate ranging from 7.00% to 7.25%. The government also satisfied five bids for 3M euro-denominated bonds for EUR 20.7 mln at 4.5% and 5M bonds for EUR 3.0 mln at 4.6%.

Evgeniya Akhtyrko: The increased demand for 1Y UAH-denominated bonds is likely to be the market's reaction to recent statements by the head of the National Bank of Ukraine (NBU) about the possibility of reducing the key policy rate. So market players are trying to take advantage of the current high rates for as long as they can.

Meanwhile, the receipts from local Eurobonds were not that impressive given the redemption of USD 423.7 mln in local Eurobonds on Jan. 16.

We expect the UAH receipts at the next weekly bond auction on Jan. 29 will show similarly strong results as players will be anxious about the NBU lowering the key policy rate on Jan. 31.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine

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