Czech FinMin delays Eurobond issue.

By bne IntelliNews April 29, 2010
The country will not offer any euro-denominated government bonds at the current juncture, finance minister Eduard Janota stated. He highlighted that currently the market conditions were not appropriate for a successful bond issue in terms of both interest in it and price, which are among the major criteria for its timing. Therefore, it could be easily postponed, but a Eurobond issue would probably be done by end-September. Janota said that there were also possibilities for private placement issues. According to him, the ministry is to adopt a wait-and-see attitude and monitor market developments until Greece fulfils the EU and IMF requirements and the EU-IMF assistance has been provided for refinancing its debt, but also until the markets settle with regard to Portugal, which rating was also downgraded by the international rating agency Standard & Poor's. The government had earlier announced plans to sell EUR 1bn in Eurobonds by end-May after it raised EUR 1.5bn from the sale of euro-denominated bonds in April 2009. Janota has also highlighted that the bond issue should not take place close to the general elections to the parliament's lower house on May 28-29. The country's banking system is not likely to experience significant problems due to the debt crisis in Greece as only some 0.5% of its assets are in Greek bonds. Still, local banks would be pressed to make write-offs as under the S&P worst scenario, the holders of Greek bonds are to take up some 30-50% of their claims. Nevertheless, the problems in Greece and the challenges in Portugal might make it harder and more expensive for the country to get money from a bond issue on the European markets. The other possibility would be domestic issues, but the market might soon be saturated, which would make the costs of debt servicing grow further.

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