Yesterday, the MoF was able to raise only UAH2.5bn (US$93mn), although they were able to sell all seven offered issues.
Most in demand were the 13-month bills and five-year notes. The MoF added the five-year notes to the auction after it announced the other six instruments. Likely, the primary dealers saw higher potential demand for this paper, and they were right. From the 13-month bills, the MoF received UAH744mn (US$27.3mn), and from the five-year note, they received UAH554mn (US$20.4mn).
Demand was not strong for the three-month bills and three-year note. These maturities garnered the least amount of interest, and provided state budget with only UAH117mn (US$4.3mn) and UAH76mn (US$2.8mn), respectively.
The rest of the instruments offered saw small, but active demand: the 1.5-year paper provided the budget with UAH203mn (US$7.5mn) and the six-year note with UAH327mn (US$12mn) of proceeds. The two-year paper brought in an amount close to the five-year paper of UAH510mn (US$18.8mn).
The Ministry accepted all demand in full and without changes in cut-off rates as demand was mostly unanimous. However, minimum rates for some instruments were different, causing small changes in the weighted average rates by 2bp and 8bp. Therefore, we can consider that interest rates were mostly unchanged.
In the end, the auction proceeds allowed the MoF to refinance just part of today's debt redemption. But with the huge amount of budget revenues received last Friday, borrowing a larger amount of new funds was not necessary. We expect borrowings to increase after the hryvnia steadies and the risk of volatility diminishes.
