MNI INTERVIEW: Slovakia Looking At Long-Bonds, FX Debt Sale

Slovakia is actively considering issuing ultra-long bonds and may sell foreign currency bonds in the near future, the head of the country's Debt and Liquidity Management Agency told MNI

Slovakia did not plan to issue a 50 or 100-year bond this year, Peter Soltys said, "but we see very favourable market situation in the segment, so we are open to any options. Everything will depend on market conditions and feedback from our primary dealers," he continued.

Similarly, while Slovakia's current cash buffer is sufficient, foreign currency debt sales are also a possibility, Soltys said, in emailed responses to questions: "We are open for such issuance in general. Our first choice will probably be to tap the US market, as this is our longer term priority in terms of foreign issuance and our only current USD bond is maturing in 2022."

Slovakia has run two debt auctions this year, without a syndicated deal and with demand in line with expectations due to nominally low yields and limited attractiveness for real money investors, Soltys said.

GREEN BONDS

Asked whether now is a good time to lock in 30-year issuance, given the European Central Bank's pandemic emergency purchase programme, Soltys said "we manage the debt in a diversified manner in line with our risk management. We tap the 30y bond (currently almost 27Y) regularly in auction together with other shorter-term maturities."

With regards to potential green bond issuance, Soltys said that while Slovakia supports a pro-environmental agenda, "we still believe the green projects can be easily financed from the existing and cheaper funds from conventional bonds." He pointed to Germany's twin issuance of common and green bonds as a possible way forward. "If the "greenium" is standard this will be a game changer for green bonds issuances in more countries," he added.