* Czechs plan three bond auctions in May
* Adds third April auction
* Markets brace for new supply, await midday auction
(Adds comments, background)
PRAGUE, April 1 (Reuters) - The Czech Republic will offer 21
billion crowns ($1.02 billion) worth of state bonds in May and
plans an extra April auction to take advantage of a rise in
demand that has slowly unthawed central Europe's debt markets.
The Finance Ministry will offer 6 billion crowns of its 3.55
percent 2012 bond, along with 7 billion crowns of a 3-year
floating rate bond that debuts in April. It will also introduce
a new 15-year fixed-rate bond at a May auction, it said.
It will offer an additional 7 billion worth of bonds in
April, on top of 15 billion crowns already planned, through an
auction of its 10-year bond due 2019.
The ministry added it would auction short-term domestic
treasury bills worth 21 billion crowns in May.
The Czechs have picked up their borrowing pace in the last
month after a cautious approach since central Europe's markets
were hammered last autumn by the widening global financial
crisis.
The ministry put on hold a planned eurobond issue in
February due to widening credit default swap prices in the
region, but last month it sold 35.4 billion of bonds in March at
three domestic auctions, almost a third more than planned.
However, it has come at a price, because yield have steadily
ticked up and markets are bracing for more supply that will
likely hurt secondary markets.
"I'm afraid on the long-end there will not be such demand,"
said a local fund manager. "The new calendar is quite a lot, so
I would expect spreads to widen."
The ministry planned to auction its 4.7 percent coupon bond
due 2022 at midday on Wednesday.
The 15-year bond <CZ15YT=RR> was quoted 86.50/88.50,
yielding 6.207/5.965, by 0908 GMT. It traded with an asset swap
spread of 205.4 basis points, up from 107 bps to start the year.
"(The new debt supply) should be quite negative for today's
auction," said Komercni Banka dealer Dalimil Vyskovsky.
Analysts also warn the new debt supply could grow this year,
especially after a no-confidence vote last week sank the
minority government. The main political parties are now
negotiating over pushing through new economic measures through
parliament that will likely push up the deficit.
The government has already adopted a series of stimulus
measures, and expects budget deficit of around 4 percent of GDP.
The opposition introduced on Tuesday a package of 15
measures it says will cost 44 billion crowns ($2.13 billion)
annually over the next three years, or around 1.1 percent of
gross domestic product.
For a TABLE with auction details, click on []
(Reporting by Jason Hovet; Editing by Victoria Main)
