Government bond auction results: Unscheduled auction

Yesterday, the MoF held a second unscheduled auction this week which collected more than UAH$500m in friendly demand. The MoF offered three bonds, including re-offerings of two local currency bonds sold on Tuesday and a 3-year USD-indexed bond.

Only one bid was submitted for each bond yesterday for a total of UAH530.0m at par value, at 14.30% for the local currency bonds and 9.30% for the USD-indexed bond. Total budget proceeds amounted to UAH532.78m.

Unscheduled auctions are usually connected to specific assignments for borrowed funds - such as Naftogaz\'s share capital increase last week - or to cover immediate budget expenditure requirements, which was the case yesterday as the MoF did not have sufficient funds. The MoF funds at the beginning of the month were the lowest they had been over the last two years, and the timing was crucial because further tax payments would be received no sooner than next week.

Considering the proceeds from yesterday\'s auction, the MoF should offer a wider range of bonds next Tuesday and most likely will announce additional unscheduled auctions through the end of this month.
Read full comment in the attachment (5 pages, PDF file 502KB)