Latvia taps credit market

RIGA - Latvia’s Treasury sold 8 million lats (11.4 million euros) in 10-year lats-denominated government bonds at an average yield of 6.72 percent as it returned to the capital markets for the first time since it took a bailout loan in 2008, reports Bloomberg. Six participants bid for the securities with healthy demand for the paper, at 19.5 million lats, according to a statement on the Riga Stock Exchange.

The auction was a “test deal” for investors and the Treasury to gauge interest in lats debt, said Kaspars Jansons, head of treasury at Citadele Bank, in an e-mail. “The yield is pretty high, which means people were not desperate to get rid of lats and invest them at any price,” he said.
Latvia has not sold 10-year debt in euros or lats since the country turned to a group led by the European Commission and IMF for a 7.5 billion euro loan package in late 2008.

The country plans to sell as much as 1.5 billion euros in Eurobonds later this year after its credit rating is lifted, Finance Minister Andris Vilks (Unity) said in an interview in Brussels on Jan. 18.
“I believe they will continue to refinance Treasury bills with regular, cheap, short-term auctions and in November go for a new 5-year bond,” Jansons said.