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MNI INTERVIEW: Slovakia Eyes USD Sale, PEPP Could Be Extended

The European Central Bank could prolong its pandemic emergency asset purchase programme if circumstances require it, a senior official from Slovakia's debt and liquidity management agency Ardal told MNI in an interview, in which he also said the country could raise debt in dollars in the medium term.

March and April this year were "extremely challenging" due to the need to issue significant unanticipated amounts of debt. Head of Debt Management Peter Soltys said in an emailed response to written questions. However, the intervention of the ECB via its PEPP started to be felt in May, he continued, and "since then we are able to cover the deficit and redemptions without any issues."

He added: "We expect the ECB to prolong the PEPP if conditions require it. If conditions are favourable and the recovery is strong then our deficits should improve as well and we should return to some more normal conditions."

DOLLAR MARKET

The country has preliminary plans to issue around nine billion in bonds, T-bills and loans next year, but does not anticipate selling foreign currency bonds, though it is monitoring the USD market with the intention of returning to that market in the medium term, Soltys said.

Slovakia will hold three auctions for around EUR500 million each by the end of this year. The debt office has no plans to issue T-bills or for syndications.

Year-to-date issuance included EUR8.5 billion in bonds, with EUR5. 5 billion in syndication and EUR3 billion at auction, and EUR3.2 billion in T-bills, with EUR1.7 billion maturing in 2020 and EUR1.5 billion in 2021.

Ardal currently has a gap in its maturity profile in 2036 and 2041, Soltys continued, indicating a potential 15 or 20-year maturity, and adding "but we can also issue anything shorter."

All expectations remain conditional until after September's macroeconomic and fiscal updates, Soltys stressed, with more precise forecast and issuance programmes to be communicated in late November.

MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com
MNI London Bureau | +44 20 3983 7894 | luke.heighton@marketnews.com

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