Primary auction schedule in July

Обзор облигаций 06.07.2015 Per the auction schedule published last week, the MoF will offer only two bonds this month. Next week, the MoF will offer a 2-year local currency bond, and on July 21, it will offer a 12-month USD-denominated bond. Of the scheduled debt repayments due this month, amounting to UAH3.61bn and UAH5.23bn, this week and the last week of July will see debt repayments below UAH2.00bn. The MoF plans to refinance large debt repayments this month but without active bonds issues. These two weeks also have scheduled mostly repayments for USD-denominated bonds which will amount to above UAH6.65bn, or US$108.68m, and US$208.00m for these weeks, respectively. Due to these repayments, the MoF will focus on the FX-bond offerings, while local currency bonds could see demand supported by domestic QE. At the same time, demand for FX-denominated bonds will also be submitted by primary dealers excluding demand from their clients as the bonds must be purchased in FX. Most likely, dealers will be unable to purchase FX to replace funds spent at the primary auction. Because of this, they will most likely reject any bids from their clients. As a result, all bonds will be purchased by state-owned banks, and there is a 30% chance that other primary dealers will purchase bonds.