Czech Republic raises bond offer as yields fall deeper into negative territory

By bne IntelliNews December 9, 2015

Yields on Czech two-year government bonds fell deeper into negative territory at an auction on December 8, encouraging the issuer to raise the offer.

The finance ministry sold CZK14.5bn (€537mn) in two-year zero coupon bonds, above the maximum sales target of CZK8bn, the central bank said. The average yield fell to -0.354% from -0.349% at the previous auction held two weeks ago.

This was the fifth tranche of the issue after a pilot in early September, when the average yield stood at -0.212%. Demand at the latest auction strengthened as the value of bids increased to CZK14.5bn from CZK12bn submitted at the November 25 auction.

The Czech government is enjoying negative funding costs on maturities of up to five years thanks to the abundant liquidity in the financial sector, which is triggered by the central bank’s currency interventions. Still, the ministry has said it is not willing to extend its issuance activity in a bid to stabilise debt at current levels.

Czech Finance Minister Andrej Babis, however, said last month that issuance will be stronger in 2016 as the ministry plans to take advantage of the low borrowing costs. The ministry plans to issue at least CZK150bn in new debt next year.

Related Articles

Kosovo's GDP growth to outstrip regional peers in 2017, IMF says

Kosovo’s economic growth is expected to reach 4.1% in 2017, among the highest in the region, which will be driven by high investment and exports, the International Monetary Fund (IMF) said on ... more

Kazakhstan’s Bank of Astana SPO to be first ever placement of foreign bank on Moscow Stock Exchange

Kazakhstan’s Bank of Astana (Astana Banki) plans to conduct a secondary offering of shares (SPO) on the Moscow Stock Exchange, RNS news agency reported last week. Bidding will begin on December 14. ... more

Mongolia named among 17 nations on EU’s first ever tax haven blacklist

Mongolia has been listed on the European Union’s first ever tax haven blacklist among 17 countries including South Korea, Namibia, Panama, Trinidad & Tobago, Bahrain and ... more

Dismiss