USD-denominated bonds sold

Обзор облигаций 04.02.2015 Yesterday, the MoF sold USD-denominated bonds for the first time in nearly two months, selling zero-coupon 48-days USD-denominated bond for redemption on March 24, 2015. The auction received one bid for US$60.68m (par value) at 8.75%, providing US$60.00m in proceeds. The 2-year and 5-year local currency bond offerings apparently received no domestic QE support. Only the 2-year bond received one bid for UAH23.71m at 16.70%, which was fulfilled. The USD-denominated bond offering was meant to replenish FX reserves prior to next week's scheduled US$218.50m repayment of principal on domestic USD-denominated bonds. The bonds most likely were purchased by a local bank which should receive part of the principal repayments next week which, under a pre-arranged agreement, will be refinanced. As local currency proceeds were low, we anticipate additional unscheduled primary auctions this week. They should receive domestic QE support, particularly since UAH2.63bn is due for repayment today and UAH0.56bn is scheduled next week.