* Poland reopens 10-year bond, books more than EUR 1 bln
* Spread set at 150 bps above mid-swaps, narrow end of range
* Initial pricing some 30 bps wider vs previous issue
* Follows successful issues in euro zone periphery
(Updates throughout)
By Dagmara Leszkowicz
WARSAW, Jan 13 (Reuters) - Poland booked more than 1 billion
euros in bids in the reopening of a 10-year euro-denominated
bond on Thursday, setting spreads at 30 basis points higher than
the original issue, Thomson Reuters market unit IFR reported.
The issue was the first test of appetite for emerging
European Eurobonds in the new year and follows successful debt
placements by southern euro zone members Portugal, Spain, Italy
and Slovenia this week.
The benchmark-sized issue is a tap of a 1 billion euro bond
<0#PL054388209=> issued at 120 basis points above mid-swaps in
September. []
Guidance for the tap was set at 150 basis points above
mid-swaps, the lower end of an intial 150-155 range, IFR
reported, citing a lead manager.
The lead said over 1 billion in bids had been locked in and
books would close at 1400 GMT. Final pricing would be later on
Thursday, it said. The bond was trading at a yield of 94 bps
over 10-year German bunds.
Bond yields have risen across Europe in the new year on
renewed worry over the financial health of countries in the euro
zone periphery and rising expectations that central banks,
including Poland's, will raise interest rates.
"The spread is wider by some 30 basis points compared to the
previous tender, but the current external environment is much
more difficult now," said one Warsaw-based dealer.
The dealer said the ministry may have tried to issue the
debt so early in the year because it fears the euro zone's
problems could deteriorate and drive up Polish borrowing costs.
Poland's zloty <EURPLN=> is also around 3 percent stronger
against the euro this year and policymakers believe it may
strengthen further -- making funds gained in euros later in the
year worth less to the government. []
"We also need to remember that the ministry wants to ensure
its financing at the start of the year and probably expects
quick strengthening of the zloty that could potentially harm the
amount of the issuance," the dealer said.
Deutsche Bank, <DBKGn.DE>, UniCredit <CRDI.MI>, ING <ING.AS>
and Societe Generale <SOGN.PA> lead managed the deal.
DEMAND FOR EURO DEBT
The bond follows forays into the market by euro zone
countries this week that have drawn strong demand. Eastern
European Euro zone member Slovenia sold a 10-year, 1.5 billion
euro bond on Monday that was oversubscribed. []
Last year Poland issued 5.25 billion euros of
euro-denominated bonds, $1.5 billion of dollar-denominated bonds
and 625 million in Swiss franc bonds.
The country is rated A2 by rating agency Moody's and A- by
Standard & Poor's and Fitch.
In December Deputy Finance Minister Dominik Radziwill told
Reuters the ministry also plans to issue Swiss franc- and
dollar- denominated bonds and is considering yen-denominated
bond issuance this year, though he gave no details.
Poland's borrowing needs are estimated at around 167 billion
zlotys ($56.70 billion) this year, some 26 billion zlotys less
than the figure planned for last year.
(Reporting by Dagmara Leszkowicz; Editing by Ron Askew)
