Finance Ministry needs 300m euros

The Finance Ministry needs 300 million euros as soon as possible to finance the budgetary deficit, which, albeit within 2.7% of GDP, turns out to be impossible to finance completely. Still thinking the domestic market is too expensive, the Finance Ministry is getting ready to borrow from the international capital market for the second time this year by reopening the 700 million euro bond issue launched early in July. This operation was to be authorised during the Government session on Tuesday night. The reopening of the summer issue falls upon the same banks, JP Morgan, Deutsche Bank, Citigroup and UPS Wartburg, and will keep the basic parameters, i.e. the seven-year maturity and the 5.75% coupon. The favourable trend of the foreign market, however, will allow releasing the new eurobonds at a lower yield. The bonds due in 2010 were registering 5.72/5.65% yields on Tuesday compared with 6.10% when first launched. At the height of the debate on which of the two markets, that is the domestic or the international market, should prevail when borrowing to finance the deficit and the public debt, the Finance Ministry is leaning towards the latter, considering it is the easiest way to get a large amount of cash on good terms and in a short period of time. ZF