Page 46 - UKRRptJuly18

bonds on the stock exchange. They also amend the chart of balance sheet accounts and the list of depository entries, so that municipal bonds' placements can be reported in custodial accounting.
Ukraine’s Finance Ministry placed local bonds for UAH900mn ($43mn) on June 5. The ministry decided against offering foreign currency bonds. Instead, three-month local bonds raised UAH484mn and six-month bonds raised UAH418mn. The placement followed last week's placement for UAH2bn. The government satisfied all 17 bids for three-month bonds resulting in a weighted average interest rate of 17.44% (vs. 17.41% on May 22). Meanwhile, the weighted interest rate for six-month bonds, which were bought by seven bidders, jumped to 17.41% from 17.23% a week ago. The ministry left unsatisfied all three bids for one-year bonds with asked interest rates ranging from 17.15% to 17.50%. The latest placement of one-year bonds on May 15 was at 17.00%. Evgeniya Akhtyrko at Kyiv-based brokerage Concorde Capital believes that the government agreed on an interest rate hike on its six-month bonds, bringing it closer to the rate for three-month bonds. "Like at the previous auction, it abstained from increasing the interest rates for its longer bonds," she wrote in a research note on June 6. "Obviously, market participants are appealing to the current uncertainty with receiving the Internationally Monetary Fund (IMF) loan tranche in trying to push the government to raise interest rates for its local bonds." Concorde forecasts the demand for UAH-denominated local bonds will be low until the uncertainty with IMF loan tranche is resolved as the government is not likely to agree satisfy bids with significantly higher rates. However, this shortage is likely to be compensated by relatively high demand for FCY-denominated bonds (nearest placements are scheduled for June 12 and June 19). Ukraine has received $8.4bn from the IMF so far under the lender's programme. However, the allocation of more tranches stalled in 2017 due to lack of progress in Ukrainian reforms, specifically, over establishing an independent anti-corruption court .
The Ukrainian Finance Ministry sold nine-month, one- and two-year US dollar-denominated local Eurobonds for $305mn at its weekly bond auction held on June 19. Nine-month US dollar-denominated bonds, which were in highest demand, brought in $162mn. The government satisfied seven out of ten bids at a weighted average interest rate of 5.20%. All 13 bids for two-year Eurobonds were satisfied at a weighted average interest rate of 5.65%, while seven out of nine bidders were successful in buying one-year Eurobonds at 5.40%. The receipts from one- and two-year bonds were $60mn and $83mn, respectively. The ministry also placed three-, six- and 10-year UAH-denominated bonds at a total amount of UAH1.5bn ($56.6mn). The interest rates for placed UAH-denominated bonds slid. Three-month bonds were placed at 17.41% (vs. 17.44% a week ago), six-month bonds - at 17.20% (vs. 17.20% a week ago), and 10-month bonds – at 17.29% (vs. 17.30% a week ago). The highest UAH receipts were from six-month bonds at UAH955mn, while three- and 10-month bonds brought in UAH130mn and UAH371mn, respectively.
46 UKRAINE Country Report July 2018 www.intellinews.com