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Concorde Capital Research: Ukraine MinFin raises UAH 8.4 bln from local bond auction

June 05, 2019 | Cbonds

Ukraine’s Finance Ministry raised UAH 1.8 bln, USD 205.5 mln and EUR 35.4 mln (a total of UAH 8.4 bln in the equivalent) at its weekly bond auction on June 4 after raising a total of UAH 3.8 bln (in the equivalent) at the auction last week. MinFin placed five types of UAH-denominated bonds with maturity ranging from three months to three years, five types of USD-denominated bonds maturing in 2020 and 2021, including puttable bonds, and 6M and 12M EUR-denominated bonds.

Around one-third of UAH auction receipts – UAH 609.2 mln – came from the sale of 1Y bonds to seven bidders at 18.5%. In addition, two bidders bought 3Y bonds for UAH 573.4 mln at 17.0%. Nine bidders bought 6M bonds for UAH 317.2 mln with a weighted average interest rate of 18.47%. Four bidders purchased bonds maturing in August 2021 for UAH 223.8 mln at 17.95%. On top of that, the government satisfied six bids for 3M bonds for UAH 106.2 mln, leaving out two bids above the cut-off rate of 18.0%.

The government satisfied all bids for bonds denominated in foreign currency. Around the half of the USD receipts – USD 100.1 mln – came from the sale of puttable bonds with a rate of 3.85% (the same as three weeks ago) and ultimate maturity in August 2020 to two bidders. In addition, eight bidders bought 1Y bonds for USD 25.4 mln at 7.25%. The rest of USD receipts – USD 1.6 mln – were brought by ten bidders purchasing 2Y bonds with a weighted average interest rate of 7.53%.

Seven bidders bought 3M EUR-denominated bonds for EUR 18.2 mln with a weighted average interest rate of 4.52%, and eight bidders purchased 1Y bonds for EUR 17.2 mln at 4.6%.

Evgeniya Akhtyrko: It looks like MinFin is being quite successful in shifting investor demand to UAH-denominated bonds with longer terms of maturity. However, the current sales of UAH-denominated bonds are not high. And it is not clear whether or not the government will be able to raise enough local debt at the current interest rates in case of increasing needs in financing the state budget deficit.

The demand of auction participants for local Eurobonds maturing in 2020 and 2021 was satisfactory. However, the government continues to use puttable USD-denominated bonds as a less expensive alternative to short-term local Eurobonds.

Issue: Ukraine, 204069 USD 03jun2021

StatusCountry of riskMaturity (option)AmountIssue ratings (M/S&P/F)
outstandingUkraine06/03/202116,386,000 USD-/-/-

Company: Ukraine

Full company nameUkraine
Country of riskUkraine

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