UPDATE 1-Czech Dep FinMin says eurobond not on agenda

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By Marek Petrus

The Czech Finance Ministry is not considering a eurobond issue right now due to poor conditions in the credit markets, Deputy Minister Eduard Janota said on Wednesday. "The situation on the eurobond market is not favourable... at the moment we are not intensively considering it," he told Reuters after a parliamentary committee hearing.

He added a eurobond could be issued at a later date but gave no details.

Finance Minister Miroslav Kalousek said last week a eurobond was under consideration for this or next year and that a decision would be made on the basis of market conditions.

The central European country's 2008 budget draft showed that the ministry planned to tap foreign bond markets next year and possibly also this year, although the outlook in the budget documents is non-binding.

The Finance Ministry plans to release its 2008 debt financing strategy on December 1.

The Czech Republic tapped the eurobond market in 2004 and 2005 with two issues, but has since shied away from foreign borrowing as domestic debt costs remained low and the budget performed better than expected.

Janota said the ministry was now assessing investors' preliminary demand for a 50-year domestic bond the ministry plans to issue by mid-November.

The ministry had asked market players if they would be interested in such a long-term paper that would carry a fixed coupon, and what yield they would ask for.

Janota said the plan would be scrapped if investors' demand is not interesting.

The bond would extend the Czech yield curve beyond the 30-year horizon now charted by a bond issued in 2006.

Keywords: CZECH EUROBOND/

[PRAGUE/Reuters/Finance.cz]