New rules for FX-denominated bonds

Обзор облигаций 18.01.2016 The NBU adjusted several FX purchasing rules for banks, thus allowing banks to purchase more FX than was sold by principal amount of FX paid to the budget on FX-denominated bond purchases. The new rules will be effective only on March 4, 2016. Investment implications: The NBU's adjusted rules will only be effective for the two currently scheduled offerings of FX-denominated bonds. These auctions are scheduled for tomorrow and February 2, 2016, but the MoF could announce additional offerings. Otherwise, the MoF is going to eliminate the primary dealer system before the third scheduled auction. The new rules will allow primary dealers to purchase FX-denominated bonds at the auction, sell them to their clients, and purchase FX from both clients and the market. The new temporary rules should allow the MoF to attract larger demand for bonds and a wider range of investors that have FX. This is useful as new FX bonds have not been available due to specific regulations.