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Concorde Capital Research: Ukraine raises UAH 18.4 bln from local bond sale

January 30, 2019 | Cbonds

Ukraine’s Finance Ministry raised UAH 9.0 bln, USD 330.7 mln, and EUR 5.6 mln (a total of UAH 18.4 bln in the equivalent) at its weekly bond auction on Jan. 29 after raising the equivalent of UAH 13.6 bln at the auction last week. As in the previous January auctions, the government satisfied all bids for local Eurobonds.

Receipts from the placement of USD-denominated bonds tripled from the previous auction. Meanwhile, 86% of USD receipts – USD 285.6 mln – came from the sale of bonds maturing on Feb. 21, which were sold to ten bidders at 6.25%. Six bidders bought 3M bonds for USD 37.6 mln at 6.5%, one bidder bought 5M bonds for USD 0.5 mln at 6.7% and 12 bidders bought 9M bonds for USD 7.0 mln at 7.25%. The government also satisfied four bids for 3M euro-denominated bonds for EUR 5.6 mln at 4.5%.

Most of the UAH receipts came from the sale of 3M bonds to 19 out of 20 bidders for UAH 3.7 bln at a weighted average interest rate of 19.50%. MinFin satisfied all 15 bids for 6M bonds with a weighted average interest rate of 18.98%, raising UAH 2.0 bln; all seven bids for 10M bonds at 18.5%, raising UAH 1.3 bln; and all nine bids for 1Y bonds at 18.47%, raising UAH 0.2 bln. The government declined one bid for 6M bonds at 19.5%, but satisfied the remaining nine bids at a weighted average interest rate of 18.96%, raising UAH 1.6 bln. MinFin satisfied none of eight bids ranging from 17.0% to 18.0% for its 5Y bonds.

Evgeniya Akhtyrko: The government's foreign currency needs apparently exceed the market capacity to supply it through local Eurobond purchases. MinFin has been experiencing a shortage in foreign currency to cover the redemption of local Eurobonds maturing on Jan. 16 (USD 423.7 mln) and Jan. 30 (USD 354.0 mln). Meanwhile, the receipts from the sale of local Eurobonds in January have amounted to USD 582.8 mln and EUR 33.3 mln.

Next month, the government’s foreign currency needs will be high again. On Feb. 21, it is scheduled to repay USD 286.6 mln for bonds placed on Jan. 29. In addition, it will need to redeem 1Y local Eurobonds for USD 457.5 mln on Feb. 27.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine

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