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Yesterday, the Ministry of Finance satisfied all bids at the auction, as none required a yield revision.
14-month military bills received 28 bids, but only for UAH0.3bn. The bid yields were in the usual narrow range of 15.1-15.15%, so the Ministry of Finance satisfied all of them without changing the cut-off and weighted-average rates.
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 43.95/USD, 51.44/EUR; [3] yields on coupon-bearing bonds are effective yields to maturity. Sources: Ministry of Finance of Ukraine, Bloomberg, ICU.
The bid quantity for the two-year security doubled from the offer two weeks ago. Still, the volume of demand increased dramatically - from less than UAH0.2bn in early May to almost UAH1.9bn yesterday. In addition, the bid yields ranged from 15.8% to 15.87%, so no bid required an increase in the cut-off rate. Therefore, the ministry fully satisfied all of them.
The increase in demand for two-year instruments could have been supported by the UAH bond redemptions last week and today, as some investors could reinvest funds into such maturity.
Appendix: Yields-to-maturity, repayments
