Slovakia claims role as CEE pioneer with 20-year bond sale

By bne IntelliNews March 3, 2017

Slovakia has sold its first ever 20-year government bond, the Ministry of Finance announced on March 3, claiming it as a first for the Central & Eastern European region.

The auction for the papers, held the previous day, saw bids from over 120 investors totalling over €3bn, the ministry said in a statement. Overall, €2bn was sold, at an average yield of 2%. Slovakia, the only Eurozone member in the Visegrad region, is pushing to take advantage of the European Central Bank’s bond-buying programme while it lasts, with moves by the US Fed to tighten monetary policy likely to put pressure on Frankfurt to trim the scheme sometime this year.

The sale of the new maturity benchmark follows a roadshow around Europe last week. The Ministry of Finance and debt management agency Ardal said the results surpassed their expectations, and illustrate the high interest in Slovak debt.

“This reflects the stability and credibility of the Slovak Republic in the eyes of domestic and foreign investors,” the ministry statement reads.

"This is a groundbreaking transaction,” proclaimed Deputy Minister of Finance Radko Kuruc. “Across the region of Central and Eastern Europe, no one has sold a bond for a period of more than 20 years in such a large volume before."

"The yield of 2% is very good compared to 15-year bonds that were sold in 2016 for 1.633%,” noted Ardal chief Daniel Bytcanek. “This issue will be particularly appreciated in the coming years, when government bond yields in the euro area are likely to increase.”

 

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