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Concorde Capital Research: MinFin of Ukraine raises UAH 18 bln from local bonds as interest rates drop

June 10, 2020 | Cbonds

Ukraine’s Finance Ministry raised UAH 7.2 bln and EUR 353 mln at its weekly bond auction on June 9 after raising UAH 2.9 bln at the auction last week. The UAH auction receipts came from the placement of 3M, 6M, 9M, 12M and 18M bonds, while the EUR receipts came from the placement of 12M bonds.

The largest UAH receipts – UAH 5.8 bln – came from the purchase of 18M bonds by seven out of eight bidders at 10.8%. MinFin satisfied five out of 11 bids for 3M bonds for UAH 527 mln at 9.0% (vs. 9.8% for the same bonds last week). In addition, four out of 11 bidders were successful in buying 6M bonds for UAH 475 mln at 9.5% (vs. 10.1% for these bonds last week).

The rest of UAH auction receipts came from the sale of 9M and 12M bonds. In particular, the government satisfied seven out of eight bids for 9M bonds for UAH 205 mln with a weighted average interest rate of 10.7% (vs. 10.9% for these bonds at the auction last week). On top of that, six out of eight bidders were successful in purchasing 12M bonds for UAH 207 mln with a weighted average interest rate of 10.7% (vs. 10.9% for these bonds last week).

MinFin satisfied all 19 bids for 1Y EUR denominated bonds for EUR 353 mln at 2.20% (vs. 2.22% for these bonds placed on Mar. 24).

Evgeniya Akhtyrko: The relatively high demand for 18M bonds implies that market participants are trying to jump onto a leaving train amid the expectations that the interest rates in Ukraine will decline further. Nevertheless, the relatively low receipts from the short-term bonds imply that the market capacity for buying UAH debt is still not that high at the moment. Therefore, MinFin is likely to use new issues of local Eurobonds as a wild card during moments of intensified needs.

Next week, MinFin is to offer local bonds with terms of maturity ranging from six to 18 months. The market expects the NBU to cut its key policy rate. And this is likely to spur a further decline of interest rates at the primary local debt market.

Company: Ukraine

Full company nameUkraine
Country of riskUkraine
Country of registrationUkraine


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