Ministry of Finance of Ukraine and National Bank of Ukraine Conduct First Switch Auction on the Bloomberg Bond Auction System

The Ministry of Finance of Ukraine, in conjunction with the National Bank of Ukraine, conducted its first switch auction on 19 February 2025, using a new feature of the Bloomberg Auction System (BAS). This new feature allows for more efficient debt and liquidity management and marks a significant milestone in the development of Ukraine’s government bond market. 

Switch auctions facilitate the exchange of previously issued government debt instruments (off-the-run) with more recently issued or auctioned instruments (on-the-run). This contributes to smoothing the debt repayment schedule and enables more efficient liquidity management.

Bloomberg’s auction system has supported government bond auctions in Ukraine since 2019. The recent switch auction is the first to use a new feature on the system, which enables market participants to bid on newly issued bonds in exchange for shorter maturity or illiquid bonds in a single transaction, instead of two separate transactions. This results in a significant operational improvement for the counterparties and streamlines the settlement process.

Yuriy Butsa, Ukraine’s Government Commissioner for Public Debt Management, commented on the event: "After months of preparation with the support of Bloomberg, we are pleased to announce the start of operations of switch auctions. Thanks to the newly introduced feature on Bloomberg’s auction system, we will have the possibility to exchange maturing government bonds into newly issued bonds which will positively impact the liquidity of the instruments traded on the market. This new auction mechanism enhances the efficiency of debt operations in the local market, while providing market participants with an additional tool to manage holdings of Ukrainian government bonds. The introduction of switch auctions marks a significant step forward in the development of Ukraine’s government bond market and its alignment with other markets internationally.”

Katharine Furber, Global Head of Emerging Markets Trading Product at Bloomberg, said: “We are delighted to continue to work with the Ministry of Finance of Ukraine to help them manage auctions more efficiently. Bloomberg’s enhanced switch auction feature provides an optimal, flexible and scalable solution for primary market issuers, who would otherwise have to conduct a manual process, or build and implement their own solution.”

Bloomberg’s Auction System, part of Bloomberg’s enterprise solutions for central banks and government financial agencies, is used to perform auction tenders electronically, and by market participants to track these auctions and enter bids. The system provides a secure environment to issue debt and buy back debt, as well as perform other open market operations, all from a single integrated solution. It is fully integrated with the data, news, analytics and communications tools available on the Terminal. Bloomberg’s auction system is used in more than 40 countries globally.

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