* Slovak debt agency plans eurobond sale in Q1, 2009
* Slovakia says ideal would be 2nd eurobond sale in autumn
* Slovak debt agency mulling Samurai bond issue
By Peter Laca
BRATISLAVA, Nov 19 (Reuters) - Slovakia aims to resume
issuing eurobonds in 2009 after market turmoil foiled its
attempts this year, planning a eurobond worth 1-1.5 billion
euros for the first quarter, the debt agency said on Wednesday.
Daniel Bytcanek, head of the Debt and Liquidity Management
Agency (ARDAL) that sells state bonds, said the euro zone member
since January 2009 would sell a second similar eurobond in the
second half of the year if market conditions were favourable.
Bytcanek estimated the agency could also separately sell
bonds worth 1-1.5 billion euros next year listed on the thin
domestic market, unlike eurobonds listed abroad, via reopening
the existing issues and adding two new domestic bonds.
"The key is the eurobond issue, which we believe could be
feasible in the first quarter of next year," Bytcanek said.
"In terms of maturity, cash flow and all other aspects, an
ideal situation would be to place two issues, one in the first
quarter, the second one in the autumn."
Bytcanek added the volumes would be 1 or 1.5 billion euros
for both issues, depending on demand.
Slovakia issued 1 billion euro eurobonds in 2007 and 2006,
aiming to create a benchmark yield curve before euro adoption.
ARDAL was only a few steps away from finalising a postponed
2008 eurobond issue in September, but it had to scrap the plan
in the week that saw the collapse of Lehman Brothers and the
subsequent increase in borrowing costs.
The agency had expected an asset swap spread of 30-35 basis
points for the September eurobond, but the market freeze brought
the spreads to current 100-150 basis points.
Relatively low debt of around 30 percent of GDP, shrinking
fiscal gap and state treasury system allowing short-term
refinancing outside the markets have shielded Slovakia from a
major impact of the global market crisis that some of its
central European peers, like Hungary, have experienced.
The debt agency would be satisfied if it managed to sell a
eurobond with a five-year maturity, expecting the majority of
bonds issued early next year to have maturity of up to three
years given the market preference for shorter debt.
If market conditions are not favourable, Bytcanek said he
would be satisfied with just one eurobond issue, preferably in
the first quarter of the year.
He said yields in general before the outburst of the
financial crisis two years ago may have been artificially low,
but added current market levels did not reflect Slovakia's
economic fundamentals and its approaching euro zone membership.
"Crisis or not, for a euro zone country, and in such a good
macroeconomic condition as Slovakia, 150 basis points seem to be
too much," Bytcanek said.
Slovakia was one of the fastest growing economies in the EU
in the third quarter, although its real GDP growth slowed to 7.1
percent from 7.6 percent in the previous three months.
ARDAL expects euro entry to broaden the base of investors
and secure demand for bond issued by Slovakia, which has an A
rating by Standard and Poor's and Fitch and A1 by Moody's.
Bytcanek said the eurobond was ARDAL's primary foreign
borrowing plan for next year, but added the agency had been
"flirting" with the idea of issuing a bond denominated in yen.
Bytcanek said investors on the Japanese market had appetite
for central and eastern European debt and were willing to buy
bonds with maturity of 10 years and more.
"If the first-quarter eurobond falls through, then the
probability of a Japanese issue rises significantly," he said.
