Since the beginning of the full-scale invasion of Ukraine by the Russian Federation, the Ministry of Finance of Ukraine has started issuing military bonds. In this article, we will tell you what military bonds are, what they are, and why it is profitable to buy them.
Military bonds: what are they
War bonds are bonds issued after the start of the war. They differ from ordinary OVHZ in that the funds from them go to support the economy during martial law. Military bonds have a certain period of validity. On the day of payment, the deposit is returned with interest.
In essence, military bonds are an investment instrument to support the state budget, available to citizens, businesses and foreign investors. Funds from bonds, attracted to the state budget, are used for uninterrupted provision of the state's financial needs under martial law — social and defense. Until August 2022, only military bonds had a secondary market.
How does a military bond work
The mechanism of placement of military bonds does not differ from the process of placement of ordinary bonds. Every Tuesday, the Ministry of Finance of Ukraine holds an auction of primary placements. About 10 of the country's largest banks — primary dealers — are directly participating in this auction. Prior to the auction, primary dealers collect bids from their clients to participate in the auction.
Read also: How to start investing in Ukraine in 2023
Legislation
After the beginning of the full-scale war of the Russian Federation against Ukraine on February 24, 2022, in March, the Ministry of Finance started auctions for the sale of military bonds. The main regulatory acts regulating the issuance of bonds, including military bonds, are:
- Law of Ukraine "On Capital Markets and Organized Commodity Markets" ;
- Decree of the CMU dated January 31, 2001 No. 80 "On the issuance of domestic state loan bonds".
Issue of military bonds in Ukraine
Military bonds are issued in accordance with the debt policy of the Ministry of Finance of Ukraine. There is no regular bond issue schedule.
What are the military bonds in Ukraine
You can buy military bonds with an investment term of 3 months to 2 years.
Important: the longer the repayment term, the higher the interest.
Military bonds at the time of writing:
| ISIN code of military bonds | Maturity period | Type of security (discount/coupon) | Maturity date | Last date of placement | Rate |
| Hryvnia | |||||
| UA4000226260 | 9 months | coupon | 09/27/2023 | 28.02.2023 | 15% |
| UA4000225908 | 1.5 years | coupon | 25.10.2023 | 06/28/2022 | 11.5% |
| UA4000226450 | 1 hour | coupon | 13.03.2024 | 30.05.2023 | 18.27% |
| UA4000227763 | 10 months | discount | 05/01/2024 | 11.07.2023 | 18.00% |
| UA4000226286 | 1 hour | coupon | 06/26/2024 | 07/04/2023 | 18.00% |
| UA4000227656 | 1.5 years | coupon | 15.01.2025 | 29.08.2023 | 18.35% |
| UA4000228449 | 1.8 years | coupon | 18.06.2025 | 09/19/2023 | 18.31% |
| US dollar | |||||
| UA4000227474 | 6 months | discount | 26.10.2023 | 05/09/2023 | 4.75% |
| UA4000227003 | 8 months | discount | 28.12.2023 | 04/25/2023 | 4.80% |
| UA4000227409 | 1 hour | discount | 21.03.2024 | 30.05.2023 | 4.85% |
| UA4000227847 | 1 hour | discount | 06/20/2024 | 07/25/2023 | 4.71% |
| UA4000228506 | 1 hour | discount | 09/05/2024 | 09/19/2023 | 4.79% |
| Euro | |||||
| UA4000227540 | 9 months | discount | 22.02.2024 | 05/09/2023 | 3.15% |
| UA4000227557 | 1 hour | discount | 05/16/2024 | 06/20/2023 | 3.11%* |
*current data as of September 21, 2023, according to information from the Ministry of Finance of Ukraine.
Advantages of military bonds
A military bond is a priceless investment that will return peace, good, and interest. This is your investment in victory. Investors' money goes to finance the needs of the Armed Forces and support the economy of Ukraine during wartime. In general, the advantage at the moment is that no proof of income is required when purchasing military bonds.
FC Daliz-Finance LLC has the ability to purchase military bonds on the secondary market, as well as the experience of purchasing military bonds through primary dealers. In the first months of the war, our clients bought military bonds worth more than 500 million hryvnias. Join their number by submitting an application on our website.
Read also: How to find and choose a broker: professional tips for an investor
Frequently asked questions: what are military bonds in Ukraine
What is the difference between military bonds and ordinary bonds
After August 2022, there is essentially no difference between military and ordinary bonds. The only significant difference between them is that citizens of Ukraine have the opportunity to purchase military bonds through the Diya portal, but in this case, there is no opportunity to sell these bonds. If you buy such bonds through a broker, there is an opportunity to sell them.
How much can be earned on military bonds
Earnings on military bonds depend on the investment amount and maturity: the interest rate is higher on long-term bonds.
