January 31, 2018 | Cbonds
Ukraine’s Finance Ministry sold at its Jan. 30 auction UAH-denominated bonds for UAH 3.6 bln and USD-denominated bonds for USD 137 mln. The UAH bonds maturing in 3M, 6M and 9M were placed at a 16.50% rate (50 bps higher from last week's tender), the one-year bond was placed at a 16.40% rate (90 bps higher from the placement seven weeks ago), and the five-year bond was placed at 15.80% (6 bps higher than six weeks ago).
The one-year USD bond was placed at a rate of 5.30% and two-year USD at 5.40%, or in line with the rates at tenders held in late 2017.
Alexander Paraschiy: It’s natural to see higher rates for the UAH bonds, given that Ukraine’s central bank hiked its key rate by 150 bps last week. The placements look successful, given that the rates of the bonds were increased much less than the key rate. Now the UAH yield curve on the local market has become clearly inverted, which is an expected development.
MinFin’s debut sale of foreign currency bonds this year looks less successful – today MinFin is due to repay USD 431 mln in local bonds, and it likely planned their refinancing with the Jan. 30 tender. With the low amount of dollar debt raised this month, we see Ukraine’s gross international reserves falling by about 2.0%-2.5% in January, with the decline to be caused by the USD bond repayment and about USD 170 mln net sale of foreign currency by the central bank.
For the next month, MinFin schedules no issue of foreign currency bonds, while Ukraine will have to pay USD 460 mln to the IMF, which will cut gross reserves further in February.
|Full company name||Ukraine|
|Country of risk||Ukraine|