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Concorde Capital Research: MinFin of Ukraine raises UAH 21 bln from local bonds as interest rates drop

May 20, 2020 | Cbonds

Ukraine’s Finance Ministry raised UAH 11.4 bln and USD 369 mln at its weekly bond auction on May 19 after raising UAH 19.4 bln at the auction last week. The UAH auction receipts came from the placement of 3M, 6M, 9M and 12M bonds, while the USD receipts came from the placement of 7M bonds.

The largest UAH receipts – UAH 6.0 bln – came from the purchase of 9M bonds by eight out of nine bidders with a weighted average interest rate of 11.0%. The second largest receipts – UAH 3.4 bln – came from the sale of 12M bonds to six out of ten bidders at 10.97%.

The interest rate for 3M bonds dropped to 10.50% from 11.26% for the same bonds a week ago. These bonds were sold to 11 out of 21 bidders for UAH 1.0 bln. The rest of UAH auction receipts – UAH 0.9 bln – came from the sale of 6M bonds to 11 out of 15 bidders. The weighted interest rate dropped to 10.78% from 11.28% for the same bonds a week ago.

MinFin satisfied 33 out of 37 bids for 7M USD bonds for USD 369 mln with a weighted average interest rate of 3.39%. The bids ranged from 3.3% to 4.0%, while the MinFin cutoff rate was 3.4%.

Evgeniya Akhtyrko: The bonds offered at the latest auction were different from the initial humble MinFin plan, which consisted of 3M and 6M UAH-denominated bonds. The increased demand for the local debt, alongside declining interest rates, is a positive development indicating lower risk assessments by market players.

Apparently, parliament's approval of the banking resolution bill on May 13 boosted confidence at the market, as the adoption of this bill paves the way for financing by the IMF and other international financial institutions. The government decision to lift gradually quarantine restrictions also alleviated negative sentiment.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine

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