The Ministry of Finance showed the constancy of the coupon – Newspaper Kommersant No. 14 (7459) dated 01/26/2023

The Treasury persists, placing bonds with a constant coupon, which is not very fond of bankers. At the same time, it strictly cuts off applications with increased profitability. According to the results of the last two auctions, the ministry attracted 62.1 billion rubles to the budget, which is 45 billion rubles. less than a week earlier (see “Kommersant” dated January 19). In the second half of the year, along with a seasonal increase in spending, the ministry may return to the previous borrowing tactics – with higher yield premiums and the placement of OFZs with a floating rate, experts say.

The Ministry of Finance persistently continues to place OFZ with a constant coupon (OFZ-PD), which the main market participants – banks – are reluctant to buy. On Wednesday, January 25, the ministry offered investors two issues of government bonds maturing in August 2029 and July 2036. Taking into account the large volume of redemption of government securities on that day (by 150 billion rubles), market participants expected that there would be no problems with demand, at least the funds would be used to purchase seven-year bonds.

However, contrary to expectations, demand for the new OFZ-PD issue amounted to only 65.4 billion rubles, which is comparable to previous auctions. At the same time, the Ministry of Finance took a tough stance, satisfying less than 10% of demand (by 6.5 billion rubles). The weighted average yield was 9.9% per annum.

“In the presence of high demand, the Ministry of Finance did not place many securities of this issue with a yield premium so as not to put pressure on the secondary market,” said Dmitry Monastyrshin, chief analyst at PSB.

“The average premium was 2 bp. p. from the level of 9.88% per annum, which we assessed as fair for the debut placement of a new issue,” said Alexander Yermak, chief debt markets analyst at BC Region. According to him, a total of 54 applications were satisfied, while the largest of them accounted for almost 75% of the placement volume.

The results of the first auction had a significant impact on the second auction with longer-term OFZs, which would have been less popular under normal conditions. The total demand for 14-year government bonds amounted to almost 88 billion rubles, 40% higher than the first auction this year for a similar issue. As a result, the Ministry of Finance satisfied 95 applications for 55.6 billion rubles. According to Alexander Yermak, the six largest bids (for RUB 3–6.5 billion) accounted for almost 49% of the placement volume, while the share of 15 smaller bids (for RUB 1–2 billion) exceeded 35%. The weighted average yield on the issue was 10.47%, which implies a premium to the secondary market of 6 bp. p., which is noticeably lower than what the Ministry of Finance provided to investors at the previous similar auction (9 b.p.).

The aggregate demand at the two auctions exceeded 153 billion rubles, which is 17–25% higher than the demand at previous auctions of this year for OFZ-PD issues. At the same time, the Ministry of Finance attracted only 62 billion rubles, while a week earlier it borrowed almost 71 billion rubles on similar securities. At the same time, the funds remaining from the redemption, according to Maxim Chernega, head of the DCM department of the corporate finance department at Tsifra Broker, will “one way or another be disposed of in the primary and secondary debt markets” and only as a last resort will end up at the deposit auction of the Central Bank.

Even taking into account the activation of the Ministry of Finance at the second auction, the pace of borrowing is insufficient for the confident fulfillment of the quarterly plan (800 billion rubles).

To implement it, according to Alexander Yermak, the issuer needs to attract about 74 billion rubles a week during the remaining auction days. weekly.

At the same time, analysts do not expect a change in borrowing tactics and believe that in the coming months the agency will continue to offer investors classic (with a fixed coupon) and inflationary OFZs. “Placement of floaters (bonds with a floating coupon.— “b”) The Ministry of Finance can use it in the second half of the year, when budget expenditures increase seasonally. In addition, in the second half of the year, OFZs in the amount of more than 400 billion rubles are to be repaid, which will require the accumulation of additional liquidity,” notes Mr. Monastyrshin.

Vitaly Gaidaev