Lower borrowings prior to redemption
Today, at the primary auction, the Ministry of Finance offered several issues of military bonds, but was able to raise only UAH3.6bn (US$123m).UAH-denominated bills provided the budget with only UAH156m (US$5.3m) of funds.
Most likely, this was due to the lack of free liquidity and already-filled limits for government bonds in banks’ portfolios. The large number of bids for these bills may mean that primary dealers purchased them mainly for their clients.
There was strong investor interest in USD-denominated bills. They received 49 bids and brought the budget more than US$80m or almost UAH2.4bn at the current exchange rate. Demand for USD-denominated paper may be delayed from last week, as was seem two weeks ago for bills in euros, as more than US$400m was repaid last week.
More investors were interested in EUR-denominated bills than in bills in US dollars. There were only seven bids, although demand was for 33 million euros. So, in general, given the low demand for UAH-denominated securities, the state budget received a decent amount of money.
The MoF will have a chance to attract more next Tuesday when the budget will repay more than UAH17bn (US$0.6bn) in principal, and, including coupon payments, more than UAH20bn (US$0.7bn).
Source: Ministry of Finance of Ukraine, ICU.
RESEARCH TEAM: Taras Kotovych
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