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Yesterday, for the second time, the MoF borrowed UAH7bn. In contrast to previous auctions, most of the funds came from a 3.5-year note.
The shortest paper, the 15-month military bills, received the lowest demand in four weeks. Demand amounted to UAH0.9bn with the same interest rates. The MoF accepted all bids yesterday.
Note: [1] payment frequency abbreviations: M - monthly, Qtly - quarterly, SA - semi-annually, @Mty - at maturity date; [2] proceeds and volumes for the USD-denominated bonds are calculated based on the previous day's exchange rate 41.53/USD, 46.99/EUR; [3] yields on coupon-bearing bonds are effective yields to maturity. Sources: Ministry of Finance of Ukraine, Bloomberg, ICU.
Ten bids for UAH1.1bn with 17.1% yields were received for the new 21-month paper, and the MoF accepted all these bids.
At the same time, the MoF received 1.5x oversubscription for the 3.5-year note. There was either one or a few big buyers. As a week before, the MoF received 28 bids, while yesterday, it received just 12 bids.
According to the rules, the MoF fully satisfied non-competitive demand and bids with rates below the cut-off level. The remaining bids the MoF accepted partially, satisfying about 65% of each bid.
Huge demand from a small number of bidders could have been situational, as this was the smallest number of bids in five weeks. On the other hand, it could have been demand from a few large investors who expect interest rates to decline soon prior to the NBU's switch to easing monetary policy.
Appendix: Yields-to-maturity, repayments
