Yesterday, the Ministry of Finance borrowed UAH6bn through the placement of two new instruments.
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 44.48/USD, 51.04/EUR; [3] yields on coupon-bearing bonds are effective yields to maturity. Sources: Ministry of Finance of Ukraine, Bloomberg, ICU.
The MoF finally closed the placement with a July 2027 maturity, raising almost UAH21bn in total outstandings. Instead, it offered new military bills with maturity in September 2027. Since the maturities of these two securities differ by less than two months, a significant portion of the bids had rates not higher than the cut-off level of the previous instrument. Therefore, the MoF satisfied 30 bids and placed the planned volume of bonds, with a face value of UAH1bn. The cut-off rate and weighted average yield were set at 15.18%, the maximum rate satisfied last week.
The second instrument yesterday was a new reserve paper. The Ministry shortened the tenor by almost six months compared with August's security, so the yields at the auction were also slightly lower. In total, 17 bids were submitted for UAH9.2bn to purchase only UAH5bn of bills. Therefore, the offer was exhausted at the yield level of 12.5%, which became the cut-off rate. At the same time, due to the considerable demand at lower rates, the weighted average yield was set at 12.44%. This is 19bp and 15bp lower than in August.
Appendix: Yields-to-maturity, repayments
