* Deutsche Bank, Barclays, Ceska Sporitelna named as leads
* No exact timing set, depends on market conditions -finmin
* First foreign bond in nearly year, issue delayed in April
(Adds market prices, dealer quote, potential size)
By Jason Hovet
PRAGUE, Sept 3 (Reuters) - The Czech Finance Ministry named
three banks on Friday as lead managers for a euro-denominated
Eurobond issue it said would take place in the "near future".
The Czechs face record gross borrowing needs this year and
are counting on a Eurobond issue to help them meet that goal.
They last sold a Eurobond, in Swiss francs, in October last
year and a euro-denominated Eurobond would be their first since
April 2009. The government scrapped plans for a Eurobond in
April when the Greek crisis drove up yields on foreign markets.
The Finance Ministry said on Friday that Deutsche Bank
<DBKGn.DE>, Barclays Capital <BARC.L> and Erste Group's
<ERST.VI> Czech unit Ceska Sporitelna would lead the issue.
It said the issue would depend on market conditions, but
declined to give further details. Debt officials at the ministry
were not available for comment.
The ministry has said before it would issue at least 1
billion euros in a Eurobond.
The ministry plans to offer 43 billion crowns ($2.28
billion) in domestic bonds to the end of the year, which would
still leave the ministry short of its gross borrowing of 280
billion. []
It has sold 130 billion crowns in domestic state bonds so
far this year, according to Reuters calculations.
"The timing for September was expected as the end of the
year is approaching quickly," said Komercni Banka trader Dalimil
Vyskovsky. "As usual, it will probably happen quite quickly."
FALLING YIELDS
Czech Finance Minister Miroslav Kalousek told Reuters in
July that he would put more emphasis on shorter bond maturities
to cut down on debt costs. []
Czech bond yields have dropped to record lows along most of
the curve in the past month, tracking Western bond markets as
investors bet on a slower economic recovery and supported
locally by government austerity pledges.
Dealers and analysts say there is still room for a drop in
yields and tighter asset swap spreads on local markets, and a
foreign issue will take supply pressure away from local markets.
The benchmark 2019 bond <CZ1002471=> yield has dropped 85
basis points since June to a record low 3.2 percent. The 5-year
bond <CZ1002737=> has dropped to 2.61 percent in that time.
A Czech Eurobond maturing in 2014, with a 4.625 percent
coupon <CZ019495752=>, was quoted with a 2.349/091 percent yield
on Friday, while a 4.125 percent coupon Eurobond due in 2020
<CZ021515329=> was yielding 3.378/141 percent.
The bonds traded with swap spreads at 70-90 basis points,
according to Reuters data.
Romania, which unlike the Czechs has grabbed IMF aid and is
struggling to keep yields down on local markets, also plans to
issue on international markets as early as October to take some
pressure off domestic issuance. []
Poland has been most active central European country on
foreign debt markets this year, issuing euro-denominated papers
worth 4.25 billion euros, and is still considering another
eurobond this year. []
(Additional reporting by Robert Mueller and Jana Mlcochova;
Editing by Ron Askew)
