(Bloomberg) -- Slovakia may delay a syndicated euro bond sale that could have fetched up to 2 billion euros ($2.2 billion) because of market turmoil caused by Russia's invasion of its neighbor, according to the head of the country's debt management.
The debt agency, known as Ardal, has enough reserves to cover maturing debt as well as the planned budget deficit this year and it's not under pressure to tap the market, Director Daniel Bytcanek said.
A sale from the euro-area member that borders Ukraine in the east was to take place late in March or early in April, but increasing risk aversion could scupper that plan, he said.
The uncertainty is also affecting Slovakia's domestic debt market. A local auction that took place three days before Russia began its attack on Ukraine drew 363 million euros of bids, well short of roughly 1 billion euros the auctions typically attract at this time of year.
“I can't imagine doing a syndicated sale in these conditions,” Bytcanek said in an interview in Slovakia's capital Bratislava on Thursday. “I'm not sure we could get the price and volume we want.”
Issuance in Europe's publicly-syndicated debt market was limited in the last two weeks amid flare-ups in global risk. There were no issuers in the market in the last two days.
Slovakia's issuance plans for the year originally included nine domestic auctions and two syndicated bond sales -- the second one in the fall -- worth as much as 6 billion euros in total. Whether and when those sales take place will depend mostly on the developments in Ukraine and their fallout in markets.
Bytcanek also said higher interest rates would make the country's debt more attractive after neighboring Czech Republic, Poland and Hungary started lifting borrowing costs aggressively to protect their currencies and tackle accelerating consumer price growth.
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