Latvian government to issue bonds worth 500 mln eur in Autumn

Latvian government to issue bonds worth 500 mln eur in Autumn

	Published : Thu, 21 Jun 2007 16:17 By : Agencies Print this Story

LATVIA (Thomson Financial) - The Latvian government will issue bonds worth 500 mln eur this Autumn, cancelling almost all the other issues of securities planned for this year, BNS New Agency reported, citing the state treasury.

State Treasury spokesman Martins Lacis told BNS that, in order to economise state budget resources, the finance minister has accepted amendments for the state borrowings for the second half of 2007, replacing the previously planned borrowings in lats with borrowings on international monetary markets.

Lacis said that the decision has been made on the basis of the government's adopted inflation curbing plan.

'The resources borrowed from the international financial markets will not be used for financing additional expenses from the state budget, but for settling and refinancing of state debts, as well as ensuring issue of loans,' said Lacis.

He said recent auctions of government bonds demonstrated that demand for the bonds is instable and depends on the lats resources in the banking system.

Investors' interest in Latvia's securities has also been influenced by Standard & Poor's downgrade of Latvia's credit ratings from A- to BBB+, with a negative outlook.

'Various events on the Latvian financial market have significantly increased interest rates in lats not only for short-term transactions, but also for medium-term and long-term instruments.

Therefore, before the domestic financial market shows convincing and sustainable signs of improvement, the State Treasury will issue securities in very limited amounts, using the international finance and capital market for ensuring the necessary financing,' said Lacis.

He said that, along with the planned eurobonds issue, auctions to sell 11-year government bonds planned for June 27 and June 28 have been cancelled. Further information on the planned issue of securities will be published not later than one week ahead of the auction.

At June 6, as many as 18 government initial placement auctions had taken place.

State Treasury data shows that in the first five months of 2007 the financial surplus to the state budget was 275.034 mln lats.

tf.TFN-Europe_newsdesk@thomson.com

bsd/ejp/slj

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.