According to the results of Tuesday's auction, UAH bond yields changed insignificantly, as the Ministry of Finance had to reject some bids and borrow less than planned.
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.
Demand for 11-month military bills was slightly above the cap, but one rate in the bids was 15.3%. However, the cap was exhausted earlier, and the bid with the highest yield was automatically rejected. The remaining 29 bids were accepted. The cut-off rate decreased by 1bp, and the weighted average by 2bp to 15.18% and 15.17%, respectively.
The MoF has not placed bonds maturing in June 2028 since May, but now they have come closer in terms of tenor to those maturing in April 2028. So, compared with them, the change in yields was the same as for shorter paper: the cut-off rate slid by 1bp, and the average weighted yield decreased by 2bp, to 15.64% and 15.63%, respectively. To obtain such yields, the Ministry of Finance rejected 5 of 13 bids, totalling more than UAH0.7bn that required rate increases. The highest bid rate was 15.87%.
Only for the 3.5-year note did MoF agree to increase yields, but not significantly. The cut-off rate increased by 1bp to 16.5%, and the weighted average by 3bp to 16.47%. This instrument received the bulk of the demand yesterday, with 41 bids totalling over UAH8bn. The UAH5bn cap was exhausted precisely at the rate levels specified above. The Ministry of Finance did not insist on the end-of-July levels, despite the previous auction at a lower key rate, and changed them only slightly.
Appendix: Yields-to-maturity, repayments
