Slovakia sells EUR 294.5mn 1-yr T-bills at avg yield of 1.97%.

By bne IntelliNews January 17, 2012
Slovakia sold EUR 294.5mn in one-year T-bills on January 16 at an average annual yield of 1.97%, the finance ministrys Debt and Liquidity Management Agency (ARDAL) said. The auction for the zero-coupon T-bills, which mature on January 16, 2013, attracted huge investor interest with bids worth EUR 892.4mn, setting the bid-to-cover ratio at 3.03. Foreign investors placed bids worth EUR 143.6mn, but only EUR 1mn of their bids were approved. The minimum yield requested by investors at Mondays auction was 1.6% and the maximum yield was 2.85%. The cut-off price stood at EUR 98.05. Slovakia borrowed nearly EUR 1.3bn in six T-bill auctions and more than EUR 4.5bn in T-bond auctions last year. IntelliNews comment: Slovakia shifted to issuing short-term government papers to refinance its debt following the aggravated debt crisis in the eurozone, which led to poor demand for long-term government bonds since the beginning of November 2011. A new five-year floating-rate bond issue failed in mid-November and a 14-year T-bond auction, originally scheduled for December 12, was cancelled. The facts indicate that Slovakia, one of the newest eurozone members, is already feeling the impact of the eurozone debt crisis, despite the countrys relatively sound macroeconomy. Slovakia will test the debt markets again on January 23, when it has scheduled an auction for a three-year T-bond issue, which sold merely EUR 30mn back in November. The country has to gather funds to redeem two-year T-bonds worth more than EUR 750mn in late-January.

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