Analytics: Week of borrowings and substitution

Analytics: Week of borrowings and substitution

Ukrainian bond markets reacted to news of the government’s new loan which was approved a week before but announced last week. Because of this loan as well as of last week’s monthly tax payments, the MoF did not refinance all debt repayments, but instead raised less than half of its needs.

Domestic bond market. Local currency liquidity significantly declined last week, mostly due to tax payments received, despite large debt repayments and CD redemptions. Last week, the MoF repaid UAH 3.21 bn, including UAH 1.04 bn in local currency repayments, while the NBU decreased its CD sout standing by UAH 1.75 bn. At the same time, the MoF sold just UAH 0.17 bn of local currency bonds.

Eurobond market. Although US Treasury yields declined significantly last week, at the end of the week they rose in response to news and newly published statistics. The impending war in Syria and the upward revision of 2Q13 GDP caused this volatility, the impact of which rippled through to Ukrainian Eurobond yields. At the same time, the Cabinet of Ministers’ resolution announced last Tuesday had a negative impact on Ukrainian Eurobond YTMs and spreads.

Taras Kotovych
Kiev, +38 044 2200120extn.244
Research Dept, Investment Banking
Investment Capital Ukraine LLC

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