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Bonds: Refinancing of redeemed debt stays robust
Within the month thus far, the Ministry of Finance has thus far raised sufficient funds to refinance the big repayments made two weeks in the past. On Could 24 and Could 31 it might additionally appeal to sufficient funds to refinance all repayments scheduled for Could. For the reason that starting of Could, the federal government has borrowed greater than Hr 19bn ($644m) for the state funds, with solely $50m in laborious foreign money.
Particularly, final week’s borrowings got here to Hr 7.5bn ($254m) the place 1.5-year payments accounted for the most important half (extra particulars within the public sale evaluation). Final week, the construction of patrons of army bonds didn’t change. New bonds had been largely bought by banks, however different residents additionally remained energetic. So, final week, the portfolios of banks grew by Hr 6.7bn ($227m), of non-banking establishments by Hr 0.3bn ($10m), and people of people by Hr 0.9bn ($30m).
International buyers didn’t purchase local-currency payments final week. Over 13,300 offers with local-currency payments value Hr 1.7bn ($58m) had been concluded on the secondary market final week. This isn’t the most important weekly quantity of transactions; nevertheless, it’s near the typical weekly quantity for the reason that Ministry of Finance started inserting army bonds.
ICU view: The curiosity of home buyers in army bonds stays excessive. We anticipate that for the remaining two auctions this month, they’re seemingly to purchase a substantial quantity of latest payments. Such purchases might be an vital help for the funds in wartime, as tax revenues and worldwide help won’t have to be spent on repaying hryvnia home debt.
Bonds: Eurobond costs rising sharply
Ukrainian Eurobond costs rose all final week, and now costs are approaching their most values for the reason that begin of Russia’s full-scale invasion of Ukraine.
Eurobond costs fell sharply on Feb. 24 and reached their lows in early March at 14-34 cents per greenback. However because the panic subsided, Eurobonds costs rose to 32-62 in early April, though they fell again once more later.
Final week, Eurobonds maturing in September 2022 rose by 7 cents to 71 cents per greenback and reached a brand new excessive for the reason that Russian invasion. Different Eurobonds added simply 3-4 cents to 40-47 cents per greenback, which is barely beneath the 42-51 cents noticed in early April.
The value of GDP warrants, which value virtually 39 cents on Friday night time, has additionally risen sharply to the best stage for the reason that begin of the conflict.
ICU view: Final week, buyers acquired a number of vital indicators from america and different G7 international locations about help for Ukraine. First, the US Congress accredited an help package deal of virtually $40bn which, amongst different issues, consists of direct monetary help for the Ukrainian state funds. Second, particular particulars of economic help from G-7 international locations started to emerge.
They’ll present virtually $20bn to help the nation through the conflict (the US monetary help is part of this quantity). As well as, the Ministry of Finance reiterated, in communication with buyers, that it sees no want to hunt Eurobond restructuring.
Such information may have contributed to a big rise within the worth of bonds maturing in September, in addition to VRIs. It seems to be more and more like Ukraine goes to see a adequate influx of worldwide monetary help within the subsequent few months and, due to this fact, can have adequate hard-currency liquidity in contrast with the quantity of scheduled debt repayments within the coming months.
RESEARCH TEAM: Vitaliy Vavryshchuk, Alexander Martynenko, Taras Kotovych
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