Daily Insight-Gov\'t bond auction results; UAH dips in the FX market

At yesterday\'s government bond auction, the MoF sold only two out of the five issues offered per the January 4 MoF announcement. The government raised a total of UAH4.3bn in local currency equivalent by selling two USD-denominated bonds with total face value of US$532m, while UAH-denominated government bonds received no offers. Interest rates remained intact when compared to offerings with similar maturities sold in the second half of last year. At last week\'s debut bond auction of 2013, a UAH1bn 5-year UAH-denominated bond was sold to a sole bidder at a 14.9% yield, the remained unchanged during most of 2012 when government friendly bidders (mostly state-run banks) purchased public debt regularly. Thus, the local bond market in early 2013 continues to be bolstered by MoF-friendly purchases by state-run banks. In the meantime, all MoF placements this year have matched upcoming debt payouts by the government. The above-mentioned UAH1bn 5-year bond sale allows the MoF to repay the UAH-denominated bonds coming due in the first two weeks of January. Yesterday\'s placement of USD-denominated bonds is quite a bold declaration of the intent to refinance this month\'s scheduled US$592m (according to our data) principal repayment to the IMF.
Attached please find the complete report, which includes supporting charts and tables for all comments (PDF file: 10 pages, 668KB)