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Slovakia Hires Banks for Sale of Five-Year Bonds as Yields Drop

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May 22 (Bloomberg) -- Slovakia hired three domestic banks to manage the sale of new five-year bonds after yields fell near a record low, the government’s debt agency said.

KBC Groep NV’s Ceskoslovenska Obchodna Banka AS, Raiffeisen Group’s Tatra Banka AS and Vseobecna Uverova Banka AS, a unit of Intesa Sanpaolo SpA, will manage the offering, which is planned in the near future if market conditions permit, the agency said in an e-mailed statement from Bratislava, the Slovak capital today.

Slovakia, which adopted the euro in 2009, is benefiting from rising demand for bonds fueled by monetary easing across the globe, which pushed down the yield on its 2021 euro-denominated bonds to 1.87 percent.

The country is rated A2, the fifth-lowest investment grade, by Moody’s Investors Service and A by Standard & Poor’s. The government plans to cut the budget deficit below 3 percent of gross domestic product as early as this year even as economic growth is set to slow to 1 percent.

The government has raised 5.8 billion euros ($7.5 billion) this year, meeting 70 percent of 2013 borrowing needs. It has 6 billion euros of debt due within one year, out of a total of 36.2 billion euros, according to data compiled by Bloomberg.

To contact the reporters on this story: Radoslav Tomek in Bratislava at rtomek@bloomberg.net; Lenka Ponikelska in Prague at lponikelska1@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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