Bonds: Primary auction announcement

Обзор облигаций 09.09.2014 Per the schedule, the MoF today will offer only the 2-year bond maturing in August 2016. Last sold in two previously held auctions, one in August and the other last week at which the MoF decreased the interest rate 80bp to 16.50%. Investment implications: Tomorrow, the MoF is scheduled to repay UAH2.61bn, of which only UAH0.60bn is in local currency (consisting of UAH300.0m of 4-month bonds sold in June and several interest payments). The bulk of the repayment is US$151.50m (UAH1.94bn at the current market exchange rate) in 1.5-year bonds sold last March. We anticipate that although the MoF will try to refinance part of the local currency debt repayments today, there will be little to no market demand or domestic QE support.