Ukraine sold $1.85 billion in government bonds at auction on Dec. 15, according to the Ukrainian Finance Ministry. It is the largest number of bonds ever issued by the Ukrainian government.
The investments attracted at the auction will secure the government’s spending on the budget, which Ukraine’s parliament approved on Dec. 15, the Ministry of Finance said.
The Ukrainian government denominated its bonds in hryvnia, dollars, and euros with different maturity dates. The tenure of hryvnia bonds with over 10% yields ranged from 3 months to 5 years, while $266 million worth of dollar bonds with 3.8% yields and €56.7 million of euro bonds with 2.5% yields have to be repaid in a year.
According to the Finance Ministry, during the auction on Dec. 15, Ukraine sold nearly three times more government bonds than at the previous auction on Dec. 8, when the country raised over $539 million.
The next two auctions are scheduled for Dec. 22 and Dec. 29.
Ukraine has attractive high yield sovereign bonds, however, investors are wary to buy them because the country has turbulent market conditions induced by the government reshuffle in March, the resignation of Yakov Smolii, head of the National Bank of Ukraine, earlier in July, and the decision of the Constitutional Court to undo Ukraine’s major anti-corruption reforms in October, investors said during the Annual Ukrainian Investment Roadshow on Dec. 15.
“Ukraine has made a lot of positive changes but now we see the reversals on the political side,” said Yaroslav Sovgyra, the associate managing director at Moody’s Investors Service.
Corruption and “all the political noise hanging around” remains the major issues that curb investment in Ukraine, said Stefan Benedetti, the portfolio manager at Plenisfer Investments.
“It is always a pleasure to invest in Ukraine but I do want to know that I can actually get my money back at the end of the period,” Benedetti added.
