Primary auctions resume

Primary auctions resume



23 червня 2015 года
ICU

Following a long hiatus, the MoF announced that it will resume primary auctions this month, offering only one 1-year USD-denominated bond with semi-annual coupon payments. This USD-denominated bond had routinely been offered over the last few years. There are two reasons for this offering: (1) the MoF could need to raise FX for Eurobond coupon payments and domestic FX-denominated bonds redemptions; (2) the MoF might need funds to refinance FX-denominated debt repayments scheduled for this year, in accordance with the EFF program's memorandum. This memorandum does not include domestic debt restructuring obligations but including obligations of rollovers of FX-debt repayments in the domestic bond market. The results should provide us with a clearer understanding of the MoF's purpose in holding this unexpected auction. If a significant volume of bonds are sold, the auction was held to refinance debt repayments. If an insignificant volume is sold, this auction was most likely an attempt to follow the IMF requirements to refinance FX-repayment rollovers without significant budget financing.

Источник: ICU

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