Yesterday, the Ministry of Finance raised UAH28.5bn, mainly in hard currency. With this amount, the MoF has ensured that the level of debt redemption refinancing will be above 100% YTD.

The offer of UAH government bonds at yesterday's auction consisted of two issues: military government bonds maturing in March next year and "reserve" bonds maturing in August 2025. The military paper was sold at 18.5%, unchanged for the second month. At the same time, bidders minimally competed for "reserve" bills. Except one rejected bid at 21%, most of bidders submitted the majority of the demand at a rate of 19.69%. In total, MoF borrowed almost UAH10bn in local currency.

The MoF offered USD-denominated bills for the second time this month, yesterdays with a shorter maturity than a week ago. The MoF received US$183m of demand in 39 bids at the usual rate of 4.75%. All bids were satisfied, and US$179m was raised. Such proceeds will fully cover all redemptions in May and YTD.

The euro-denominated bond placement went even better. Demand was EUR337m, but not unanimous. Approximately 10% of the demand had a rate higher than the rest, 3.25% against 3.15%. So, the Ministry of Finance accepted 11 out of 15 bids at a rate of 3.15%. Indeed, it is 65bp higher than EUR-denominated bills sold in the past twelve months (excluding two placements at the end of 2022). However, thanks to this increase, it was possible to attract almost EUR297m to the budget, which, together with the funds raised in January and February, will exceed tomorrow's first EUR-denominated redemption this year.

The Ministry of Finance fully refinanced today's local-currency redemption and accumulated the necessary funds for FX redemptions in May. Today's repayment in euros is almost fully refinanced, and a large amount of USD has already been accumulated for the repayment, which will be in two weeks. Accordingly, taking into account the fact that by the end of the month, there will be two more auctions with UAH and FX bills offers, the refinancing level should be above 100% in 5M23.

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RESEARCH TEAM: Taras Kotovych.

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