May 25, the MoF finalized refinancing of last week's principal repayments without changes in cut-off rates, and with only small movements in weighted-average rates.
Out of total demand for the auction, the Ministry rejected just one bid for a small amount, insufficient for total proceeds. A few bids for the five-month bills were partially accepted.
The Ministry usually sets a cap for the shortest maturity, but yesterday, demand was mostly unanimous. Therefore, bids with lower rates were accepted in full, and bids with a rate of 9% and non-competitive bids were accepted partially. As a result, the cut-off rate remains unchanged at 9%, while the weighted-average rate declined a mere 2bp to 8.48%.
There were no changes in rates for the 1.5-year and three-year instruments. For the 14-month and two-year bills, the weighted-average rates rose to the same level as the cut-off rates, by 1bp and 3bp to 11.2% and 12.05%, respectively. Fourteen-month bills and three-year notes collected the largest demand yesterday, UAH3.1bn (US$114m) and UAH1.2bn (US$44m) respectively, so we assume that part of demand was from foreigners.
However, without material changes in rates and accepting 96% of total demand for the auction, the MoF received almost UAH6bn (US$217m) of funds. For the last two weeks, local-currency proceeds were UAH10.4bn (US$378m), which exceeded debt principal repayments in the market last week. In total for the month of May, the MoF refinanced its principal repayments nearly in full.