The Ministry of Finance raised almost UAH16.8bn (US$439m) at the debut primary auction this year, but mostly in hard currency. Cut-off rates did not change for all instruments.

Demand for the shortest bills, those maturing in November 2024, caused a decline in the weighted average rate, while the cut-off rate remained unchanged. There were 24 small bids with rates in the range of 16.78‒16.84%, so having satisfied all demand, the weighted average rate slid by 4bp to 16.8%.

Bonds maturing in October 2025 received 14 bids with 17.5‒17.6% rates for UAH1.2bn (US$32.8m) at par value. The Ministry of Finance satisfied all demand without changes in the cut-off or weighted-average rates.

For the second consecutive month, interest rates on three-year notes maturing in February 2027 remained unchanged. Yesterday, there were bids with rates 10bp below the usual level of 18.6%, which did not affect the weighted average rate.

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The rates for FX-denominated bills have not changed either. For USD-denominated paper, the MoF kept rates at 4.66%, selling bonds within the cap. For bills in euros, placement was at a fixed rate and with exclusively non-competitive bids (satisfied at a weighted average or fixed rate), so the Ministry set the usual rate for puttable bills at 2.5%.

The Ministry of Finance attracted a large amount of funds yesterday, primarily in preparation for January redemptions. The funds raised will be sufficient for redemptions in UAH and USD in January. However, for tomorrow's redemption of EUR-denominated bonds, the Ministry has already raised most of the funds and will be able to ensure 100% refinancing later. At the same time, investors focused on FX-denominated instruments, and UAH funds are less than 1/5 of all budget proceeds.

RESEARCH TEAM: Taras Kotovych

See the full report here.

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