There was greater investor activity in yesterday's auction than in previous weeks, and the Ministry of Finance attracted almost UAH8.2bn for the budget, refinancing almost 70% of today's redemption.
Although redeeming almost UAH12bn of debt, the Ministry of Finance did not set caps on the amount of bonds offered. However, they did not agree to raise rates due to the relatively small additional amount of borrowings.
The greatest demand was for short-term bills—semi-annual and 13-month — which provided the budget with UAH6.6bn or almost 81% of all funds received. For the semi-annual bills, the Ministry rejected only one bid in the amount of UAH100m, which was 50bp higher than all other demand.
In addition to semi-annual bills, there was also interest in the six-year notes, where demand was even less unanimous. Of the 14 bids, four had rates higher than the cut-off level of the last week’s auction, and the MoF decided to reject them and 1/5 of demand of almost UAH200m. The three-year securities brought almost UAH0.7bn to the budget.
However, the other three instruments — 14-months, two and five-year notes — received little demand and had little effect on the amount of borrowing.
Although it was a good auction in general, the vast majority of the funds raised will be due next year, so they likely were bought mainly by domestic investors. Foreigners were not very active yesterday, probably limiting their investments to the six-year securities.