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Concorde Capital Research: Ukraine MinFin raises UAH 7.9 bln from local bond auction

June 19, 2019 | Cbonds

Ukraine’s Finance Ministry raised UAH 1.9 bln, USD 100.2 mln and EUR 112.7 mln (a total of UAH 7.9 bln in the equivalent) at its weekly bond auction on June 18 after raising a total of UAH 6.6 bln (in the equivalent) at the weekly bond auction last week. MinFin placed four types of UAH-denominated bonds with maturity ranging from four months to two years; 10M, 1Y and 2Y USD-denominated bonds; and 6M EUR-denominated bonds.

The highest UAH auction receipts – UAH 679 mln – came from the sale of 1Y bonds to 17 out of 18 bidders with a weighted average interest rate of 18.45% (the same as a week ago). MinFin further lowered the interest rate for bonds with the shortest term of maturity, setting the cut-off rate for 4M bonds at 17.85%. With this interest rate, the 4M bonds were bought by seven out of 18 bidders for UAH 473 mln (vs. 17.95% for 3M bonds a week ago). In addition, the government satisfied all 18 bids for 6M bonds for UAH 461 mln at 18.34% (vs. 18.36% a week ago). The rest of the UAH receipts – UAH 296 mln – came from the sale of 2Y bonds to eight participants at 17.95% (the same rate as a week ago).

The government satisfied all bids for bonds denominated in foreign currency. The highest USD receipts – USD 53 mln – came from the sale of 1Y bonds to 11 bidders at 7.25%. In addition, 12 bidders bought 10M bonds for USD 33 mln, also at 7.25%. The rest of the USD receipts – USD 15 mln – came from the sale of 2Y bonds to 16 bidders at 7.75%.

Nine bidders bought EUR-denominated 6M bonds for EUR 113 mln with a weighted average interest rate of 4.60% (the same rate as for 1Y EUR-denominated bonds two weeks ago).

Evgeniya Akhtyrko: The Finance Ministry was quite successful in raising foreign currency receipts from placing local Eurobonds. However, the demand for local Eurobonds with maturity exceeding one year is not significant.

MinFin effectively shifted demand away from UAH-denominated bonds with maturity below 6M by lowering their interest rate.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine

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