It is reported that on October 20th the Finance Ministry of Ukraine was placed local bonds at the average coupon rate of 27% which is an increase of 400 BP. In particular, 8 months local bonds had been placed at 27% 11 months bonds at 27.5% and 2.5 year bonds at 27%.

According to Millennium capital analyst “We see that the increase in the coupon rate was related to the fact that the government needs additional funds in order to redeem the previous bond issues. We believe this decision is reasonable, since an insufficient flow revenues to the State Budget make sovereign bond quite a risky asset, which makes it imperative that the coupon rate on these bonds be brought closer to the average market coupon rate.”

(Sourced from Millennium capital)