Czech Government Delays Sale of Eurobonds Until Markets Pick Up in Autumn
The Czech Republic has further delayed its planned sale of bonds in euros until at least September because of the July and August holidays.
The offering of at least 1 billion euros ($1.26 billion) of bonds won’t take place before market activity picks up in September, according to a banker involved in the transaction, who asked not to be named as details are private.
Barclays Capital, Deutsche Bank AG and Ceska Sporitelna AS were hired in February for the sale of foreign bonds, which was delayed in April as borrowing costs surged on concern south Europe’s debt crisis will spread. Three Czech political parties that won May general elections said on June 30 they plan deeper fiscal-deficit cuts next year than the country pledged in its road map to euro adoption.
“Market activity is traditionally lower in holiday months,” economist Jan Vejmelek at Komercni Banka AS in Prague said today. Conditions are “not completely ideal” as investors remain concerned about south Europe’s budget deficits, he said. “In the autumn it may also be clearer what specific fiscal measures the new government will take,” he said.
The Finance Ministry won’t confirm or deny that the sale has been delayed until September, its spokesman, Jakub Haas, said by phone. The ministry will sell the bonds in euros when market conditions are favorable, he said.
The three parties agreed on a common political program and will sign an accord to form a coalition today at 6 p.m. in Prague, Prime Minister Petr Necas said on July 9.