FinMin sells eurobonds worth EUR 750m with record-low yield

Prague, Oct 2 (CTK) - The Czech Finance Ministry sold an issue of ten-year government bonds worth EUR750m (Kc18.8bn) with a yield of 2.871 percent on Monday, ministry spokesman Ondrej Jakob told CTK yesterday.

"This is the lowest yield the Czech Republic has ever reached on the foreign public financial market," Finance Minister Miroslav Kalousek said.

It is also the lowest yield on a ten-year bond reached by any country of Central and Eastern Europe, Kalousek added.

Monday's issue was the second tranche of an eurobond issue. The first tranche in the amount of EUR2bn was issued in February.

"The reason for reopening the issue was a big interest of investors in bonds issued within the first tranche on the secondary market," the ministry said.

According to Deputy Finance Minister Jan Gregor, the transaction will enable the Czech Republic to achieve favourable conditions for further government bond issues.

"It will contribute to cutting the costs of state debt financing, and thus also to savings in the state budget," Gregor said.

According to analysts, the situation on the government bonds market is favourable for the Czech Republic this year, with Czech government bond yields falling to all-time lows at the end of August

The average yield on a ten-year bond was 3.15 percent at end-August, compared with 3.90 percent a year ago.

The Czech Republic has saved tens of billions of crowns worth of interest costs thanks to the trust it has built on financial markets, Kalousek said earlier.

According to the state debt financing and management strategy for 2012, the Finance Ministry wants to borrow over Kc243bn this year. In 2013 it plans to borrow Kc238.8bn.