Czechs sell more long bonds than planned, yield up

                                
 PRAGUE, June 16 (Reuters) - Investors flocked to buy a Czech
government bond due 2024 amid rising yields in an auction on
Wednesday, allowing the Finance Ministry to sell more than
planned as it looks to meet this year's record borrowing needs.
 The ministry sold 6.95 billion crowns ($335 million) worth
of the 5.70 percent coupon bond <CZ1002547=> and investor demand
reached 11.04 billion in the first, competitive round of
bidding. [ID:nPRA005112] <CNB08>
                                
 The average yield at the auction rose to 4.582 percent from
4.332 percent in the previous auction of the paper on April 21.
                                
 The ministry had planned to sell only 4.25 billion crowns in
the competitive round. It will offer another 750 million in a
non-competitive tender later. It was the sixth auction in a row
it sold more than planned.
                                
 "The FinMin as usual was able to sell to everyone who wanted
to buy," a bond dealer said. 
                                
 "Currently long bonds are in better demand than short
bonds."
                                
 Demand contrasted with a Polish auction where investors bid
for only slightly more than was sold. [ID:nLDE65F15I]
                                
 The Czechs have stepped up issuance to meet a 280 billion
crown gross borrowing target this year. Analysts have estimated
only a third of that figure will be reached in the first half.
                                
 Markets have expected yields to continue rising given the
heavy issuance in the second half.
                                
 But some dealers -- citing Czech bonds' relative value
compared to paper from major issuers -- forecast yields won't
rise as sharply as thought, especially after a victory for
austerity-minded parties in a May election. [ID:nLDE65F15Z]
                                
 The yield of the benchmark 2024 bond has risen almost 30
basis points on secondary markets since the last auction and the
spread over the 15-year 6.26/24 German bond <DE113492=> has
risen to 167 basis points from 92 points.
                                
 The Czech 2024 bond <CZ15YT=RR> was quoted down 3 basis
points on the day at 3.486 percent by 1120 GMT after trading
flat before the auction.
                                
(Reporting by Jason Hovet; editing by John Stonestreet)