OFZ Auction Results - March 18, 2021

At yesterday's OFZ auctions, the Finance Ministry placed the full R60 bln on offer with negligible premiums. Following the auctions, the ministry now needs to place R84 bln per auction day, assuming this year's placement target (R3.7 trln) remains unchanged, or R61-68 bln if it is reduced by R600-875 bln, as several Finance Ministry officials have proposed recently. We believe that by placing R60 bln yesterday, the ministry may have indicated that it is leaning toward cutting this year's borrowing target by R0.9 trln.> The Finance Ministry placed in full the R20 bln on offer in the 10y nominal OFZ 26235 (March 2031), R30 bln in the 5y nominal OFZ 26234 (July 2025) and R10.2 bln in the 10y inflation-linked OFZ 52003 (July 2030). It placed the 10y nominal paper with a small premium of about 2 bps, while the other two issues were placed at secondary levels.> Sanctions headlines and commentary that appeared while bids were being collected for the 5y issue appear not to have significantly affected the course of the placements, though they reduced the number of participants: the number of satisfied bids was small for both the 5y nominal paper and the inflation linker (about 10 in each auction).