BRATISLAVA, December 19, (WEBNOVINY) — Slovakia continues to refinance its debt using short-term T-bills. The state sold securities worth EUR 272.6 million in Monday’s auction of 98-day treasury bills maturing at the end of March of next year. The securities from the Monday auction were sold exclusively to local investors.
The overall demand in the auction reached EUR 570.3 million while bids from foreign investors totaled EUR 85.7 million. The Finance Ministry’s Debt and Liquidity Management Agency (ARDAL) only accepted bids of local investors with interest rate standing at 1.8014 percent p.a. The average demanded interest rate was 1.8511 percent p.a. Minimal accepted rate stood at 1.4001 percent p.a. and maximum rate amounted to 2.1401 percent p.a.
This was the third auction of short-term treasury bills since mid-November when Slovakia started seeing problems on the financial market with limited demand of investors in government bonds. ARDAL scheduled the latest auction in the timetable of auctions after canceling the auction of government bonds planned for December 12 following weak demand of investors in the two previous auctions.
Slovakia will try to borrow money on the financial market to cover the state debt again on January 23 of next year. ARDAL plans to float government bond number 217, i.e. originally a three-year security maturing in 2014. The state tried to sell this security at the end of November of this year and investors only purchased bonds worth EUR 30 million. Slovakia will also have to redeem two-year bonds in the value exceeding EUR 750 million in late January.
To date, ARDAL borrowed over EUR 893.1 million in this year’s six T-bills auctions representing a short-term alternative to service the state debt and provide liquidity. The state borrowed additional over EUR 4.5 billion using government bonds.
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 issues also included EUR 3.5 billion syndicated sale of two issues of benchmark bonds from April and October. The agency sold T-bills worth EUR 2.421 billion last year, too, up from EUR 1.259 billion a year ago.
SITA
