* To offer 22 bln crowns in bonds in June vs 21 bln in May
* Nearing full-year target, analysts expect more issues
(Adds analysts, background)
PRAGUE, May 4 (Reuters) - The Czech Republic on Monday
showed no signs of easing up its borrowing despite a return to
foreign debt markets in April, and looked to be on course to
pass its full-year debt targets soon.
Investors have opened a window for central Europe's
hard-pressed governments to boost borrowing as appetite for
riskier emerging markets grows on the heels of western pledges
to make funds available for victims of the global downturn.
The Czech Finance Ministry said it would offer 22 billion
crowns ($1.10 billion) worth of state bonds in three auctions in
June, up from a planned 21 billion offered this month.
The ministry will close the first half of the year by
offering 7 billion crowns of a 15-year bond that debuts in May,
8 billion crowns of the 5.0 percent 2019 bond, and 7 billion
crowns of its three-year floating rate bond.
The ministry added it would auction short-term domestic
treasury bills worth 18 billion crowns in June.
The government has raised its borrowing, but at higher
yields, as the state budget outlook deteriorates amid slumping
revenue from businesses suffering falling euro zone demand for
their goods.
The finance ministry expects the overall public sector
fiscal gap to triple this year to 4.5 percent of gross domestic
product as the economy contracts more than 2 percent.
The Czechs sold 1.5 billion euros in a 5-year
euro-denominated bond last week, pricing it at 190 basis points
over swaps, up from 25 basis points for a 10-year bond it sold
in June 2008.
Analyst Jan Cermak of CSOB bank estimated the ministry has
issued more than 105 billion crowns in bonds so far this year,
including sales on secondary markets and foreign markets.
The ministry expected in a December report that it would
issue up to 132.6 billion in bonds in 2009, but analysts say
this could widen up to 250 billion.
"The conclusion is quite clear: the issuance will be heavy
even after these calendars for May and June," Cermak said. "The
autumn will be quite challenging."
Dealers said the eurobond had taken some pressure of
domestic bonds, but expect prices to weaken later as borrowing
needs increase.
The Czech 3.55 percent coupon bond due 2012, which will be
auctioned on Wednesday, was quoted at 4.179/3.545 percent on
Monday, 115 basis points over swaps, down from February high of
166 basis points.
The European Commission, the EU's executive arm, forecast on
Monday that no central European state would escape recession.
Poland, best placed among its peers, said last week it was
planning at least a $1 billion dollar denominated bond. Hungary,
which had frozen debt issues since getting an IMF lifeline last
autumn, restarted regular auctions last month.
For a TABLE with auction details, click on []
(Reporting by Jason Hovet and Jan Lopatka, editing by Mike
Peacock/Victoria Main)
