Poland sells EUR 0.96bn worth of 5-, 10-yr T-bonds at auction, with higher yields

By bne IntelliNews February 14, 2014

The ministry of finance has sold PLN 3.01bn at the main auction and another PLN 1.01 at a non-cash supplementary auction in bonds of series PS0718 (maturing in July of 2018) and DS1023 (maturing in October of 2023), or EUR 0.96bn, vs. the combined value of supply at PLN 3.0-5.0bn.
It sold the shorter note at yield of 3.88% (vs. 3.69% at the January auction), while the market expected it at above 4.54% (vs. 4.34% in January). Market expectations were above 3.85% and 4.53-4.54%, respectively.
Analysts estimate that after this auction, the ministry of finance has secured around 60% of this year's state budget borrowing needs (totalling around PLN 132.5bn, or EUR 31.8bn). However, they note that the ministry failed to sell its entire offer as investors were asking for higher yields.
Still, the size of demand shows that Polish Treasury papers are still popular, while the zloty's strengthening shortly prior to the auction suggests that a significant part of buyers came from abroad.
As of February, Polish privately-owned open pension funds (OFEs) are forbidden to invest in Treasury debt instruments.

Related Articles

Protests against judiciary reform continue to rock Poland

Polish protests against the government's judiciary reforms continued for a sixth day on July 23, as crowds sought to add to pressure on President Andrzej Duda to veto the controversial bills that ... more

Czech judiciary denounces Poland's move to end separation of powers

Senior Czech judges on July 21 denounced Poland's judicial overhaul as an attack on the rule of law. With big street protests in the Czech Republic's neighbour seemingly gathering momentum – 120 ... more

Strongly profitable Czech petrochemical maker Unipetrol puts cracker explosion behind it

Unipetrol looks to have finally got over the August 2015 fire and explosion that wrecked its steam cracker, an indispensable installation in the production of ethylene feedstock needed to manufacture ... more