Slovakia taps 2 lines of...>

SLOVAKIA AUCTION PREVIEW: Slovakia taps 2 lines of bonds on Monday, E74mln of

SLOVGB 1.375% 2026 (#228) and E100mln SLOVGB 1.875% 2037 (#232). 

- BACKGROUND: Today is the first Slovakia auction of the year. This is not the

most liquid of curves and so auctions provide liquidity moments. There is a

massive E46bln of EGB coupon and redemption payments on Monday that will

certainly help.

- RV/HISTORY: The Slovakian yield curve tends to trade at a small yield premium

to the Irish curve but has outperformed Ireland in the past month. Slovakia has

almost identical credit ratings to Ireland and much of the yield premium is

justified by the near zero liquidity. Slovakian auctions are seen as liquidity

events and so the offering should go well. The #228 was last sold on 16 Oct at a

yield of 0.7796% and cover of 5.6x and #232 was last sold on 20 Nov at a yield

of 1.6326% and cover of 4.8x. 

- TIMING: Auction cut-off at 1000GMT, results are due around 1015GMT.