Bond Market Insight-Weekly review: New bond offerings initiated

The Ukrainian debt remained very attractive to investors whose appetite for risk provides Ukrainian issuers with FX funds. The MoF, despite its preference for FX funds, issued no Eurobonds last week, and instead sold several local currency and USD-denominated bonds.

Domestic bond market. Last week, local currency liquidity was low after the routine Naftogaz payment to Gazprom with slight volatility and remained at UAH22.0bn due to new government bond offerings. The MoF sold a large volume of new local currency bonds after insignificant interest repayments.

Last week\'s primary auction was mostly oriented to restore MoF FX reserves as the MoF amended its scheduled offerings by adding a 1.5-year USD-denominated bond. This week, we will see the addition of a 6-month bond, an issue not offered in nearly one year, for which we anticipate significant market demand.

Eurobond market.The Eurobond market remained steady at interest rates amenable for new Eurobond offerings. Investors had funds and risk appetites to actively purchase Eurobonds offered by Ukrainian issuers. Last week, one deal was completed and one offering was announced, with state-owned Oschadbank completing its new Eurobond issue and DTEK announcing a bond buy-back and new offering to replace its re-purchased bonds.
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