MNI INTERVIEW:Slovakia Eyes 10-12Y Bond, Lower Issuance Target

Slovakia will look to issue a syndicated bond with a maturity of 10-12 years this autumn, the head of the country’s debt and liquidity management agency ARDAL told MNI, with a reduction in the annual issuance target also possible as a result of better-than-expected budget developments.

Despite double-digit inflation - much of it attributable to soaring energy costs - Bratislava so far has not introduced any fiscal support schemes that would materially affect funding plans announced in December, Peter Soltys said.

Instead, there is a chance that the target - which assumed a budgeted deficit of EUR5 billion - could be cut.

“We want to issue around 6 billion in the whole year,” Soltys said. “We see a positive development of public finances and a lower budget deficit. A reduction of the targeted amount to EUR4.5 – 5bn is possible.”

10-12 YEAR BOND

ARDAL is currently a little behind in its programme for the year, Soltys conceded, pointing to the decision to skip spring’s planned syndicated deal due to a combination of rising yields, the Russian war and overall uncertainty. But the country “had and still has” a substantial cash buffer, and is not under pressure to issue new debt despite the challenging circumstances, he said.

At the start of the year ARDAL announced it was considering issuing one or two new bonds - a medium-term bond of EUR3 or 5 billion, and a long-term paper with an eventual size of EUR5 billion. Slovakia is now leaning towards a longer-term bond in the autumn, with the precise timing of the next deal yet to be determined.

“Our feeling right now is that it will be a bond with maturity from 10 to 12 years,” Soltys said. “These maturities fit into our redemption profile. But we will definitely consider even something longer if the situation is favourable for such maturity.”