Finance Ministry cuts yield for four-year govt bonds to 11.7% with demand growing to UAH 11.4 bln
The Finance Ministry of Ukraine at Tuesday auctions before the anticipated review of the refinancing rate downwards by the National Bank of Ukraine (NBU) in two days was able to place new 48-month government domestic loans bonds cutting the yield to 11.7% compared with 12.64% recorded two weeks ago for the 45-month securities.
According to a posting on the website of the ministry, the offer of 48-month government bonds was limited with UAH 3 billion (the nominal value), although initially there was no limit, while demand for the securities most popular among nonresidents reached UAH 11.36 billion.
As a result, the Finance Ministry satisfied 22 out of 57 applications with an average yield of 11.67% per annum, dismissing 35 with yields up to 12.5% per annum.
Another successful auction was the sale of 36-month securities with a cut-off yield of 12.05% compared with 13.12% in a similar auction four weeks ago. With an offer amounting to UAH 1 billion, demand for them reached UAH 2.02 billion, and the Finance Ministry dismissed four out of 12 applications for which buyers requested up to 13.25% per annum.
At the same time, for shorter securities – five months and 10 months – the placement volumes were lower than the supply volume, which amounted to UAH 300 and 500 million, respectively. In particular, the 10-month government bonds were sold for UAH 212.6 million, while demand was only UAH 18 million more, and the yield for them was reduced to 13% from 13.5% three weeks ago.
As for the five-month bonds, the Finance Ministry refused to sell them at the yields requested from five applications for UAH 348.49 million varying from 14.1% to 14.75%.