Government bond auction results: MoF borrows to repay VTB loan

On the threshold of the VTB loan repayment, which is scheduled within the next two weeks, the MoF collected funds yesterday for approximately one-fourth of the repayment volume, which will support easing the debt repayments burden scheduled for this June.

Initially, the MoF had announced an offering of six different bonds, adhering to schedule for the most part. But likely, one of the prospective investors was interested in the 3-year bond, instead of the same bond with a 2.6-year maturity, which could be the main reason for the MoF\'s expanding of its list of offered bonds.

From three bonds denominated in local currency, demand was only seen for the 12-month bond and 3-year, USD-indexed bond. But, the MoF once more rejected non-competitive bids for the 12-month bond, and sold UAH50.00m of USD-indexed bonds.

Key borrowings in US dollars were made via the placement of three USD-denominated bonds, and a bond with maturity in January, 2015 was ignored by the market. The largest volume of budget proceeds was collected for the 12-month, USD-denominated bond placement, amounting to US$235.07m, and the rest of the funds were collected in the following volumes: the 2-year bond was sold at a total volume of US$150.04m, and the 3-year bond at a total volume of US$150.00m.

In total, the MoF collected US$535.17m yesterday at rates ranging from 8.9-9.3%, which will help the Ministry to partially refinance upcoming debt repayments this June. At the same time, taking into the account the MoF\'s intentions to issue USD-denominated domestic bonds for the VTB loan repackaging, VTB may likely buy these bonds directly or via the local branch of the bank.
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