Lithuania taps eurobond market

2010-07-21
From wire reports

VILNIUS - The Lithuanian government began on July 19 the sale, through a primary auction, of bonds denominated in euros on the NASDAQ OMX Vilnius exchange, which is a subsidiary of NASDAQ OMX Group, reports news agency LETA. Until now the bond auctions have been held only in the Lithuanian national currency, the litas.

The primary auctions create competition among the auction participants that facilitate state borrowing in the local market in the most efficient way,” said Arminta Saladziene, chairman of the exchange’s management board. “From now on, state borrowing will be possible not only in the local currency but also in euros, and we believe this new opportunity will be attractive to government bond investors,” Saladziene added.

The government bonds auctions are held on the NASDAQ OMX trading platform, whereas the clearing and settlement of the trades executed at auctions are handled by the Central Securities Depository of Lithuania.
The central government debt level in May was 31.6 billion litas (9.1 billion euros) in Lithuania, or 33.8 percent of the projected GDP for 2010, reports the Ministry of Finance. During May, central government domestic debt decreased by 31.4 million litas, and made up 6.8 billion litas (21.6 percent of total central government debt).
Central government foreign debt increased by 423.1 million litas and amounted to 24.8 billion litas (78.4 percent of total central government debt).

The central government was indebted to the domestic financial sector for 5.6 billion litas, foreign financial institutions – 21.9 billion litas, international organizations – 2.8 billion litas, other creditors (households and non-profit institutions) - 863.2 million litas, non-financial sector - 352.9 million litas.
Total long-term central government debt made up 30.3 billion litas (95.6 percent of total debt), short-term debt – 1.3 billion litas (4.4 percent of total debt).

The Ministry of Finance of Lithuania plans to issue euro-denominated government bonds once per month.