(Repeats story published late on Monday)
* Final price set at mid swaps +105 bps
* Volume set at 2 billion euros
* Covers rest of 2010 borrowing needs, early 2011
By Jana Mlcochova
PRAGUE Sept 6 (Reuters) - The Czech Republic sold 2 billion
euros of an April 2021 Eurobond on Monday, twice lowering yield
guidance thanks to strong demand, and covering the rest of its
outstanding 2010 borrowing needs, the Finance Ministry said.
The final price was set at mid swaps plus 105 basis points
after initially taking bids at 115/120 points. The coupon was
3.625 percent.
"Realizing the issue covers the remaining borrowing needs
for 2010 and the first months of 2011," Deputy Finance Minister
Jan Gregor said in a statement.
With the public sector funding gap expected to reach 5.3
percent of gross domestic product this year, the Czechs face a
record 280 billion crowns in gross borrowing needs.
The ministry has sold 130 billion crowns in domestic state
bonds so far this year and plans to offer 43 billion crowns in
domestic bonds by the end of the year.
The Eurobond sale means some 50 billion crowns and the gross
borrowing figure also includes 12.7 billion in loans from the
European Investment Bank.
Net treasury bills issuance was set at maximum 25 billion
crowns in the official plan, although dealers said the ministry
had raised that to 44 billion.
All of this combined would mean an income of around 280
billion, as planned.
GOOD TIMING
The debt sale marked a turnaround from April, when the
then-interim government scrapped plans for a Eurobond as the
Greek crisis drove up yields on foreign markets.
Global risk aversion has abated, pushing yields down, and
the new Czech centre-right government has introduced austerity
plans, winning praise from rating agencies and pushing yields
down more.
"The pricing is fairly cheap and the interest of investors
seems high, which these days is an important thing," said Robert
Weiner, fixed income dealer at UniCredit.
"So I think it's good for all involved parties, whether they
be investors, the managers or the issuer."
It is the republic's largest euro bond since June two years
ago, when Prague issued a 2 billion 10-year euro bond at just 25
basis points over swaps before the economic crisis hit debt
markets.
The outstanding Czech 2019 Eurobond <CZ021515329=> was
quoted at a yield of 3.389/151, down nine basis points over
Friday's close. It was trading at 84 basis points over mid
swaps.
By comparison regional peer Hungary, which is still
struggling to emerge from crisis, saw its 10-year benchmark
Eurobond <HU021299367=> trade at a yield of 5.715/267, or 318
points over midswaps at 1345 GMT.
The Czechs last sold a Eurobond, in Swiss francs, last
October. This is their first euro-denominated Eurobond since
April 2009, when the ministry priced a 1.5 billion euro bond at
mid swaps plus 190 basis point.
(Reporting by Jana Mlcochova; editing by Michael Winfrey,
Patrick Graham and Martin Golan)
