Finance Ministry raises record volume in a single auction yesterday

Finance Ministry raises record volume in a single auction yesterday



22 червня 2012 года
Конкорд Капитал

Ukraine’s Finance Ministry sold T-bills worth of UAH 6.7 bln (USD 0.84 bln) in a primary auction yesterday. The government raised UAH 1.5 bln via the sale of five-year bonds (cut-off rate at 14.3%), USD 100 mln in one-year bonds (cut-off at 9.3%), USD 175 mln and EUR 40 mln in puttable three-year bonds (cut-offs at 4.5% and 4.8%) and USD 317 mln in bullet three-year bonds (cut-off at 9.45%). Most of the applications were submitted for UAH-denominated bonds and one-year USD bonds (5 applications each). Yesterday’s auction brings the total amount of debt raised by the government in the local market to UAH 39 bln or USD 4.9 bln (excluding UAH 5.2 bln of notes maturing by end-2012), 64% of the full-year target for domestic borrowings.

Vitaliy Vavryshchuk: The upsurge in demand for short-term FX-denominated T-bills is likely related to the NBU's recent decision, which allows for the accounting of 10% of banks’ holdings of FX bonds as part of their obligatory reserves (refer to our NBU news of June 21). Banks now have incentives to invest cash into FX bonds rather than keep it idle on correspondent accounts with the central bank. Longer-term USD, EUR papers were likely purchased by state banks as the accepted rates seem well below the market. The results of yesterday’s auction are extremely positive and we think the NBU’s resolution will revive demand for FX bonds for the coming weeks. Overall, the government should be able to raise another USD 1.0-1.2 bln to the budget in FX papers through end-2012 (which will also be an addition to NBU reserves), according to our estimates.

Источник: Конкорд Капитал

Аналитик: Виталий Ваврищук
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