PRAGUE Tue Jan 13, 2015 5:50am EST
PRAGUE Jan 13 (Reuters) - Slovakia opened the books on a new 12-year bond on Tuesday, seeking to tap international markets as yields fall on chances the ECB will soon begin buying euro zone sovereign debt.
The central European country, rated 'A' by Standard & Poor's, is jumping into markets early in 2015 after being absent for much of 2014, when it was trying to keep its debt load below legal limits that would force budget cuts.
Slovakia is joining a raft of other euro zone governments issuing new debt as bond yields across the region sink on expectations the European Central Bank will loosen policy soon.
Final price guidance for the Slovak 12-year syndicated bond was 57 basis points above mid-swaps, tightened from the initial guidance in the area of 60 bps, Thomson Reuters news and market analysis service IFR reported. Demand was more than 5 billion euros just before books were set to close, IFR said.
Slovakia last tapped euro markets a year ago, when it sold a 15-year, 1.5 billion-euro bond at 105 bps over mid-swaps.
It has mandated banks KBC, Societe Generale and Erste Group for the new issue.
The country, which has cut its budget deficit below an EU-prescribed limit of 3 percent of gross domestic product, needs to raise about 5.1 billion euros in bond issues this year, a touch higher than in 2014.
Debt agency Ardal plans to offer up to 2.5 billion euros in syndicated sales. Besides 12-year paper, Slovakia will also look at a new bond with a 5-7 year maturity. It will also offer up to 3 billion worth of bonds in domestic auctions.
Slovakia's debt is below 55 percent of GDP, well below euro zone averages. Its economy is expected to grow 2.6 percent in 2015, up from 2.4 percent forecast for this year. The country has benefited from recovering growth, falling deficits and demand for yield in Europe's low-interest-rate environment.
The yield on a 10-year Slovak benchmark bond has dropped by half since the middle of 2014 to 1.134 percent, 67 bps over a similar German bund. (Writing by Jason Hovet; Editing by Larry King)
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