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Concorde Capital Research: Ukraine raises UAH 6.7 bln from local bond sale

February 06, 2019 | Cbonds

Ukraine’s Finance Ministry raised UAH 6.4 bln and USD 9.9 mln (a total of UAH 6.7 bln in the equivalent) at its weekly bond auction on Feb. 5 after raising the equivalent of UAH 18.4 bln at the auction last week.

The highest UAH receipts came from the sale of 3M bonds to 24 out of 26 bidders for UAH 3.0 bln 19.50%. Four bidders bought 7M bonds for UAH 1.9 bln at 19.0%. The government declined one bid for 6M bonds at 19.5%, but satisfied the remaining 24 bids at a weighted average interest rate of 18.92%, raising UAH 0.9 bln. MinFin also sold 10M bonds to two out of three bidders for UAH 10.2 mln at 18.5%, 1Y bonds to all seven bidders at a weighted average interest rate of 18.47% for UAH 281 mln and 2Y bonds to seven out of eight bidders at 18.0% for UAH 218 mln.

Three-quarters of the auction’s USD receipts came from the sale of 1Y bonds to ten out of 13 bidders for USD 7.4 mln at 7.25% – the same rate at which 9M bonds were placed last week. The government satisfied all eight bids for 6M bonds for USD 2.5 mln at 6.7% (the same rate as the last week).

Evgeniya Akhtyrko: The government’s foreign currency needs in February are high, given the redemption of local Eurobonds for USD 286.6 mln on Feb. 21 and for USD 457.5 mln on Feb. 27. Meanwhile, these results indicate that the market capacity to supply foreign currency through the purchase of new local Eurobonds is apparently not sufficient to cover these needs.

Oschadbank (OSCHAD) is scheduled to pay USD 477 mln on its international Eurobonds in March. So, one of the important participants in the local bond market is not likely to be in play, as it needs to accumulate foreign currency for its own repayments.

To catch up with foreign currency receipts, the government might resort to hiking interest rates for local Eurobonds.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine

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