Central bank says Slovakia may not need further Eurobond

Slovakia, about to issue a Eurobond next week, may not need a second issue in the next few years if its economic reform plan is carried out, a central bank official said on June 2.

"I don't think there will be a need if the budget is consolidated... but this is from the present point of view," National Bank of Slovakia Chief Executive Director Elena Kohutíková said at a stop on the current bond's roadshow.

Slovakia has said it is about to launch a five-year issue of about 300 million euros, although details have not been set. The bond is due to be listed in Frankfurt and Luxembourg and placed next week if market conditions allow, issue lead managers JP Morgan and Credit Suisse First Boston said.

Slovakia's new government on May 31 announced a package of measures designed to ensure it meets its 1999 fiscal deficit target of two percent of gross domestic product. The government raised the lower level of value-added tax (VAT) to 10% from six percent and imposed a seven percent import surcharge.

Finance Minister Brigita Schmögnerová at the roadshow confirmed a recent central bank statement that the current Eurobond issue would be the last one this year. She also said it was possible Slovakia would seek a loan of $80 million to $100 million from the World Bank to help the restructuring of its banking sector, which includes the sell-off of bank IRB by the end of this year and of bank VÚB by the end of the year 2000.

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