NBU announces interest rates for secondary market deals

Обзор облигаций 08.07.2015 In its presentation yesterday of new instruments recommended by the Monetary Policy Committee in June, the NBU announced its intention to offer 6-month bonds with a 22% yield, 12-month bonds with a 20% yield, 17%, 15% and 12% yields for 3-year, 5-year and 10-year bonds, respectively. CDs with maturities up to 3-months will be evaluated at tenders. Investment implications: The NBU is going to extend its yield curve at both the money market and bond market, offering bonds from its portfolio. This will provide additional bonds to the market which have been unavailable for some time from the MoF. The NBU's deals will provide the MoF with real bond yields that could attract real demand, rather than domestic QE supported bids, at the primary market. If the NBU launches new offerings this week, the MoF could be more flexible at next Tuesday's announced primary auction.