The First Domestic Sovereign Bond Sale Auction Is Declared by the National Bank of Ukraine
The first sovereign bond sale auction will be held at the trading platforms of the Perspektiva Stock Exchange and the FSTS Stock Exchange on 8 December 2015. VAT DS bonds UA4000185557 maturing on 22 July 2019 will be auctioned. Under the auction rules, the opening price and the amount of bonds to be auctioned are not set. In the course of the auction, bidders will offer their own purchase terms to the NBU (the amount of bonds and the price) by submitting competitive bids. Bids will be satisfied starting from the highest quoted price. All transactions in securities will be settled on a “delivery of securities versus payment of funds” basis on the auction date.
The launch of sale and purchase auctions is aimed at ensuring a more flexible regulation of the money market and banks’ liquidity. In accordance with NBU Board Resolution № 762, “On Approval of the Procedure for Buying/Selling Ukrainian Securities through the Launch of Auctions at the Trading Floors of Stock Exchanges”, the NBU may initiate such auctions for two reasons. The first reason is to regulate the money market. To this end, the regulator may both buy and sell the aforementioned securities. The second reason for initiating these auctions is to settle claims under refinancing and repo operations. In this case the regulator may sell securities that are used as collateral against these operations.
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