Bosnias Serb Republic fails to sell EUR 8.7mn issue of 9-mo T-bills.

By bne IntelliNews June 8, 2012
Bosnias Serb Republic failed to sell any of the planned nine-month Treasury bills worth BAM 17mn (EUR 8.7mn) on the Banja Luka Stock Exchange on June 7, although it received bids for BAM 3.2mn, the Republics finance ministry said in a bourse filing. It gave no reasons why it rejected the bids. A total of 1,700 securities at BAM 10,000 par value each were offered for subscription. The highest offered price was equal to 97.317 of par, or to an interest of 3.7%, while the lowest one was equal to 96.76% of par (4.5% interest). This was supposed to be the Republics sixth issue of Treasury bills. It last sold T-bills in March when it placed 76% of a bigger BAM 35mn offer of six-month securities. The demand totalled BAM 40.4mn but the average accepted price was equal to 98.27% of par, or a 3.5% yield, up from 98.35% of par (or a 3.36% yield) accepted in the previous T-bills auction held in December. In April, the Republic sold BAM 26mn of seven year bonds, which were part of a bigger BAM 30mn issue. The demand totalled BAM 43.1mn. The bonds were sold at an average interest rate of 6%. The Republic is one of the two autonomous parts that make up Bosnia. The other one is the Muslim-Croat Federation. The governments of the two entities have been increasingly relying on the domestic debt market to finance their budgets after Bosnias cheap international financing was put on hold at the end of 2010. IMF officials started talks with Bosnian authorities in May for a possible new stand-by deal. The countrys inability to meet fiscal criteria on its previous IMF deal has resulted in Moody's downgrading Bosnias government bond rating to B3 from B2 in April. Furthermore, Moodys said it has started a review for a possible further rating cut.

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