OFZ Auction Results - December 22, 2021. Less Than a Half of 4Q21 Borrowing Plan Raised

The Finance Ministry wrapped up this year's auctions today, placing R40 bln total in 10y and 20y nominals. Both auctions went off with only negligible yield concessions, though demand was not impressive enough to spark a rally at the long end in the secondary market. Overall, the Finance Ministry placed R247 bln of OFZs in nominal terms in 4Q21, short of the R520 bln indicative quarterly plan. This underscores the Finance Ministry's high flexibility amid higher than budgeted non-oil and gas revenues. Nevertheless, the primary supply will likely get heavier in 1Q22 as next year's annual borrowing program corresponds to R800 bln borrowing per quarter.> The 10y OFZ 26239 (July 2031) was allocated in the full offer size of R20 bln. The weighted-average yield was 8.48%, implying no yield premium. Demand was R37 bln, the lowest at the auctions for the bond since July 7. The share of noncompetitive bids was rather high at 63%, while the two largest accepted bids were noncompetitive. > The 20y OFZ 26238 (May 2041) also saw the full R20 bln placed. The weighted-average yield printed 8.43%, only 1 bp above the secondary market. Bids amounted to R25 bln, also the lowest since July 7. The allocated volume was dispersed in small tickets across 189 bids. The noncompetitive share was 53%.