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“Now we want to study for ourselves the demand for 'exotics' within the country” – Alfa-Bank Ukraine's exclusive commentary on the first fruitful trades in US Treasury notes on the Ukrainian Market

May 29, 2019 | Cbonds

On May 21, the PFTS Stock Exchange reported on the first successful trading in US Treasury notes on the Ukrainian market. Cbonds contacted the initiator of this transaction (Alfa-Bank Ukraine) with a request to comment on it. Viktor Sizonenko, Head of trading of Alfa-Bank Ukraine, kindly answered the questions posed.
Not so long ago, Freedom Finance Ukraine announced the launch of US Treasury Notes US9128283U26 on the Ukrainian market in the amount of approximately 1 million USD.  Was the transaction made by Alfa-Bank Ukraine on May 21 a resale of part of this portfolio?  
No, Alfa-Bank Ukraine bought these securities on the international market at the beginning of last week. Thus, American bonds "crossed the border." We felt the demand from customers since the beginning of the year, and we are glad that we could go all the way and satisfy it. I think this is just the beginning. 

How long did the launch of this package take on the Ukrainian market? 
Most of the time was taken by the preparatory process of placing foreign securities on the bank balance sheet. And the transaction itself — from buying securities abroad to selling on the stock exchange — took a couple of days.  

Does Alfa-Bank Ukraine plan to launch on the domestic market of Ukraine any other US government securities and whom does it see as potential buyers? 
Yes, we are considering the option of appearing and “quoting” on the domestic market of securities of foreign issuers, and not only US treasury bonds. Now we want to study for ourselves the demand for "exotics" in the country. Based on such demand, we will try to find interesting liquid foreign securities. The investment rating will be common in these securities, and at first it will be still the same bonds. As buyers, now we see demand from institutional investors with long-term money, legal entities and natural persons who already have significant investments in Ukrainian securities and foreign currency deposits and want to diversify their investments.  

What is the minimum amount with which a customer can come to Alfa-Bank Ukraine if he/she wants to purchase US government securities, provided that their circulation on the Ukrainian market has already been approved by the National Securities and Stock Market Commission? 
We do not set the minimum "checks" for the purchase, for example US9128283U26, which we talked about earlier; you can buy them for $100. And we can sell securities not only to our customers. Since the securities are approved for circulation and listed on stock exchange lists, any customer of any bank/broker in Ukraine can purchase them just like any other Ukrainian share or bond. We send our quotes to market participants every day. Before buying the securities, it is important for the buyer to estimate his/her costs, accounting for securities with the custodian, brokerage commission, etc.  

Does Alfa-Bank Ukraine plan to support the secondary market of the notes? 
Yes, we already support it.

Issue: USA, Note 2.375 31jan2023 5Y

StatusCountry of riskMaturity (option)AmountIssue ratings (M/S&P/F)
outstandingUSA01/31/202338,997,034,500 USDAaa/-/AAA

Company: Alfa-Bank Ukraine

Full company nameJSC "ALFA-BANK" (Ukraine)
Country of riskUkraine
Country of registrationUkraine
IndustryBanks

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