Slovakia sold 5.790 billion crowns ($181.3 million) worth of 4-year floating-rate government bonds in an auction that attracted strong demand on Monday, the finance ministry's Debt and Liquidity Management Agency said. Total demand in the ninth sale of the paper reached 11.820 billion crowns, up from 10.805 billion seen in the previous reopening of the bond in June.
The 4-year floating bond, which was launched as a 5-year paper last year, is one of the most popular issues in state auctions, although dealers said most investors hold it until maturity as it is very lightly traded.
"Demand was very strong today, and the accepted volume was not so surprising as it looked very cheap for the state," said ING Bank trader Martin Koska.
The bond's coupon is tied to 12-month Bratislava Interbank Offered Rate (BRIBOR). The coupon is fixed at 3.35 percent.
The bond's face value is 100,000 crowns, and the average price at Monday's auction stood at 100,421 crowns.
The government has seen its refinancing cost decline in the past few months with banks hunting for investment opportunities because of a shortage of new debt issues.
The finance ministry has been selling smaller amounts of state bonds this year as favourable developments in state budget and a more effective management of state finances have cut borrowing needs.