(Repeats story published late on Thursday)
* Czech finmin: Eurobond possible in H1, 10-15 yr maturity
* No more Eurobonds planned, but up to next govt
* Drops idea of dollar-denominated bonds
* Says Greece faces "very tough task" to cut deficit
By Jana Mlcochova and Jan Lopatka
PRAGUE, Feb 18 (Reuters) - The Czech Republic may raise 1-2
billion euros through a 10-15 year Eurobond issue in the first
half, Finance Minister Eduard Janota said on Thursday.
Detailing the ministry's borrowing plans, he said he was no
longer considering a dollar issue and also planned no more
domestic euro-denominated or variable-rate paper which the
ministry used last year.
The minister, member of a caretaker cabinet, said he planned
no more than the one Eurobond issue but his successor due to
take office after May 28-29 election may change the plan.
The Czechs, rated 'A' by Standard and Poor's, need to borrow
a record 280 billion crowns ($14.70 billion) in 2010 to cover
new and maturing debt as the budget gap narrows slightly amid an
anaemic recovery.
Market speculation of an impending Eurobond heightened after
the ministry cut back a 15-year domestic auction last week after
yields jumped. []
Janota pointed out on a printed-out graph how yields had
risen shortly before the auction, saying that was the reason for
the cutback rather than lack of demand, and reiterated that a
euro issue was not imminent although it could come by June.
"We can issue a Eurobond still in the first half of the year
and I am serious, although originally I was not so strongly
convinced about it as a bigger proportion of (debt) repayments
comes in the second half," Janota told Reuters in an interview.
He said shorter maturities could be more favourable
financially for the Eurobond but he needed to take into account
the country's debt profile and expected refinancing needs.
"I know these days it is better not to go above 10 years (in
maturity). But I have to respect the development of the next
repayments and I have to have that in some smoothed level. I
cannot ignore that factor."
"We will draft the charts... and it (the Eurobond) will be
something between 10 and 15 years."
The issue will only take place if it is cheaper than issuing
debt on the domestic market, including hedging costs, he said.
The Czech 10-year Eurobond <CZ021515329=> yielded 17 basis
points less than the domestic 10-year benchmark on Thursday.
NO BIG IMPACT FROM GREECE
Janota said the Greek debt crisis had not made a big impact
on the market, with Czech spreads, or premia to hold Czech bonds
rather than safe German bonds, rising only slightly.
The Czech 10-year bond <CZ10YT=RR> yield traded 114 basis
points over the corresponding German Bund <DE10YT=RR>, up from
62 basis points at the beginning of the year.
Greek 10-year debt <GR10YT=RR> traded to yield 338 basis
points over the Bund on Thursday.
Janota said Greek debt problems could affect other EU
countries. He said he felt sorry for the tough job the Greeks
faced in cutting the budget gap as required, or by 4 percentage
points of GDP this year.
"I would not want to be in the shoes of the Greek finance
minister, it is simply crazy."
SEES NEXT CABINET CUTTING DEFICIT
Janota said he believed the next government formed after the
election would stick to his euro convergence programme, a plan
annually submitted to the EU which sees the Czech budget deficit
falling to 3 percent in 2013 from 5.3 percent seen this year.
Opinion polls show that the leftist Social Democrats, who
have advocated extra social spending and higher taxes, have the
biggest chances of forming the next cabinet. []
Janota said the leftists' plan to hike taxes as well as some
spending could work to cut the deficit. But a policy of imposing
higher taxes on corporations may have a negative impact on the
country's competitiveness and exports, key driver of growth.
(Editing by Stephen Nisbet)
