Slovakia sells EUR 581.5mn in 2014, 2016 T-bonds.

By bne IntelliNews March 20, 2012
Slovakia sold EUR 581.5mn in two- and four-year T-bonds at an auction on March 19, the finance ministrys Debt and Liquidity Management Agency (ARDAL) said. The government sold EUR 280.9mn in two-year zero coupon T-bonds, which mature on April 7, 2014, at an average annual yield of 2.13%, compared to EUR 283mn of the papers sold at the previous auction on February 20 at an average yield of 2.54%. The issue attracted strong investor interest, with bids worth EUR 616.8mn, setting the bid to cover ratio at 2.2, up from 2 a month earlier. Foreign investors placed bids worth EUR 168mn, but only EUR 50mn of their bids were approved. The minimum yield requested by investors was 1.95% and the maximum yield was 2.48%. ARDAL sold EUR 300.6mn of the four-year issue, which bears a fixed annual coupon of 3.5% and matures on February 24, 2016 at an average annual yield of 2.85%. The bid to cover ratio reached 1.78, as dealers placed bids worth EUR 536.1mn, including EUR 200.6mn from foreign investors. The minimum yield requested by investors was 2.79% and the maximum yield was 3.25%. The previous auction of the four-year issue, held on October 31, 2011, attracted bids worth only EUR 35mn and sold EUR 30mn at an average annual yield of 3.31%. IntelliNews comment: At the end of last year Slovakia shifted to issuing short-term government papers to refinance its debt, as the aggravated debt crisis in the eurozone led to poor demand for long-term government bonds since the end of October 2011. But in January, demand for Slovak government securities improved, as a two-year T-bond issue, which sold merely EUR 30mn in November, sold EUR 305.2mn, a few days after S&P downgraded the sovereign ratings on Slovakia by one notch to A. In February, Moodys downgraded Slovakias long-term sovereign rating by one notch to A2 and assigned it a negative outlook, but the government managed to sell EUR 351.5mn in two- and four-year T-bonds a few days later. In January the country sold EUR 1bn of five-year bonds in its first international offering of debt securities since April 2011.

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