Czech Republic sells EUR 363mn in 2016, 2023 bonds, yields mixed

By bne IntelliNews January 22, 2014

The Czech finance ministry sold CZK 10bn (EUR 363mn) in 2016 and 2023 government bonds at an auction on January 22, in line the maximum planned amount, the central bank said.

The ministry sold CZK 5bn of the 3.5-year bond that carries a fixed annual coupon of 0.5% and matures on July 28, 2016, the same as the amount sold at the previous auction of the paper held on October 23. Investors’ demand strengthened to CZK 18bn from CZK 7.5bn helping the average annual yield fall to 0.379% from 0.511% in October. This was the seventh tranche of the issue.

The ministry also sold CZK 5bn of the bonds that mature on April 18, 2023 and carry a floating interest rate equal to the 12-month EURIBOR plus 65bps. At the previous auction of 2023 bonds held on September 18 the ministry placed CZK 4bn. Bidders submitted offers worth CZK 10.1bn, up from CZK 7.3bn at the September auction. The average discount margin increased to 13.048bps from 10.992bps in September. This was the 20th tranche of the issue.

The ministry was planning to sell between CSK 3bn and CZK 5bn in each of the sales. In January the ministry will hold one more auction at which it will offer for sale 2021 bonds seeking to raise between CZK 3bn and CZK 6bn and 2036 bonds of between CZK 1bn and CZK 4bn.

Bonds with a maximum nominal value of CZK 50bn to CZK 60bn will be offered for sale in the first quarter of 2014.

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