Military bonds re-opening

Обзор облигаций 08.09.2014 The MoF sold UAH21.25m (par value) "military" bonds last Thursday at the standard 7.00% rate. While these bonds have not been offered in three weeks, yesterday's auction was not very active and attracted two bids, which was slightly higher than the demand seen at the two previous offerings of "military" bonds. Only demand at the debut offering of these bonds was larger than that seen yesterday. The "military" bonds did not see large demand most likely due to the low interest rate which is less than 50% of the rate offered for regular bonds at the primary bond market. As a result, the MoF sold only UAH91.74m of these bonds. Domestic QE support was not seen at this auction, most likely because the MoF does not currently need significant funds for the Ukrainian army. Although the MoF could announce additional offerings of "military" bonds either with other bonds or separately, we do not anticipate large demand.