BRATISLAVA, March 25, (WEBNOVINY) – Slovakia is planning to float a new issue of government bonds worth EUR 1.5 billion and use this money for debt service coverage and to ensure liquidity. The Finance Ministry’s Debt and Liquidity Management Agency (ARDAL) decided to float the three-year bond of the No. 217 series as of April 6, 2011. The first auction titled 217 A will take place on April 4. The bonds will mature on April 7, 2014.
At the beginning of this week, Slovakia sold bonds for EUR 35.1 million. Investors bid EUR 129.3 million in the Monday’s auction of originally 20-year bonds that will mature in 2026. Foreign players offered EUR 43.9 million but ARDAL did not accept a single euro from this bid. The bonds will thus end up in the hands of local investors.
Investors requested an average interest rate of 5.2561 percent p.a. Minimum requested interest rate reached 5.0800 percent p.a. and maximum rate represented 5.4462 percent p.a. ARDAL sold bonds at an average rate of 5.1171 percent p.a., with minimum rate of 5.0800 percent p.a. and maximum of 5.1500 percent p.a.
Slovakia could raise almost half of this year’s national debt refinancing requirement through issues of syndicated bonds. The overall need for debt refinancing this year is EUR 8.5 billion. According to the head of the Finance Ministry’s Debt and Liquidity Management Agency (ARDAL) Daniel Bytcanek, they could sell up to EUR 4 billion of government debt through syndicated bonds this year.
„Overall, we plan to sell through syndicated bonds of about EUR 4 billion and the rest through auctions in the domestic market which is open for foreign investors,“ he said in late January, and specified that in 2011, Slovakia could launch two or three syndicated issues in the spring and autumn. „The actual date of bond issues will depend in particular on the situation on financial markets,“ he said.
Last year, ARDAL raised EUR 7.094 billion in bond sales to cover the state debt and to provide liquidity. This represented a significant increase from the EUR 4.208 billion obtained in 2009. The increase was caused by a higher need to refinance the state budget deficit. Last year’s sale included also the EUR 3.5 billion from a syndicated sale of two issues of benchmark bonds from April and October of last year. The agency sold T-bills worth EUR 2.421 billion last year, too, up from EUR 1.259 billion a year ago. This year, with the exception of the last auction, Slovakia has sold government bonds worth EUR 2.079 billion, including a syndicated bond sale worth EUR 1.25 billion.
SITA