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Concorde Capital Research: MinFin raises UAH 17 bln from local bonds, interest rates drop 40 bps on average

July 31, 2019 | Cbonds

Ukraine’s Finance Ministry raised UAH 17.2 bln at its weekly bond auction on July 30 after raising UAH 7.0 bln at the auction last week. This is a record high hryvnia receipts at weekly auctions. MinFin offered five types of bonds with maturities ranging from three to 66 months.

More than half of the auction receipts – UAH 10.9 bln – came from the sale of 5.5-year bonds to 32 out of 36 bidders with a weighted average interest rate of 15.45% (vs. 15.84% three weeks ago). MinFin also satisfied 32 out of 45 bids for 3Y bonds for UAH 5.4 bln with a weighted average interest rate of 16.42%. In addition, 22 out of 39 bidders were successful in buying 1Y bonds for UAH 0.5 bln with a weighted average interest rate of 16.51% (vs. 16.99% last week).

The government satisfied all 11 bids for 6M bonds for UAH 401 mln and all six bids for 3M bonds for UAH 19.5 mln. The weighted average interest rate for 6M bonds dropped to 16.41% (vs. 16.68% last week), while the rate for 3M bonds lowered to 16.23% (vs. 16.63% last week).

Evgeniya Akhtyrko: We were right in our assumption that MinFin will go further in lowering interest rates given the high demand for Ukrainian local debt. The results of the latest auction imply that the MinFin is not likely to stop experimenting with lowering rates. The recent appreciation of the national currency to its three-year high only increases the attractiveness of UAH-denominated debts for non-residents.

However, a further decline in interest rates will increase the disproportion between the cost of local debt and the central bank’s interest rate, which is currently at 17.0%.

Issue: Ukraine, 204150 UAH 26feb2025 Benchmark

StatusCountry of riskMaturity (option)AmountIssue ratings (M/S&P/F)
outstandingUkraine02/26/202520,349,991,000 UAH-/-/-

Company: Ukraine

Full company nameUkraine
Country of riskUkraine

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