By Nick Shamim

London (MNI) – Finland has only E6 to E7 billion worth of bonds
left to issue for the remainder of this year, having already sold E10
billion so far, according to Mika Tasa, a senior manager at the
Liquidity Management and Funding section in the Finnish State Treasury
Agency.

A new five-year bond is still scheduled to be launched in September
or October and the exact timing will depend on market conditions, Tasa
told Market News International.

Tasa declined to comment on market talk that the issue will be
launched next week.

The new five-year bond is expected to be of benchmark size, i.e.
between E4 to E5 billion. Depending on its success, the debt agency will
arrange one or two bond auctions in the remaining part of this year,
said Tasa.

The debt official confirmed that the tap auctions are expected to
come after the five-year syndicated deal.

The issuance of a new five-year bond marks a shift from the usual
strategy of issuing a five-year and an 11-year benchmark bond in
alternate years.

So far Finland has so far sold E8 billion worth of long-term
benchmark bonds and E2 billion worth of European medium-term notes —
equivalent to 60% of this year’s bond issuance programme, Tasa
confirmed.

Asked whether the debt agency was concerned about lagging in its
issuance programme compared to EMU neighbours, where Ireland and Belgium
have completed 99% of their targeted sales, Tasa noted that Finland’s
borrowing is the smallest amongst EMU countries, apart from Luxembourg
and other smaller countries like Slovenia and Slovakia.

In June Finland scaled back its gross borrowing target by E1.5
billion as growth is expected to pick up in the latter half of this
year, said the Finnish State Treasury.

“The Ministry of Finance expects the Finnish economy to turn to a
path of growth, with GDP growth forecast at 1.5% this year. According to
the Ministry’s estimate, the growth will be rather fast in the latter
half of 2010. In particular, exports will grow again after a plunge in
2009 caused by the global recession,” said the Treasury.

Finland’s gross borrowing for this year is estimated to be roughly
E28.5 billion. Issuance of Treasury bills is seen around E11-13 billion,
down from the previous estimate of E13-14 billion). Long-term bond sales
are estimated to be E16-17 billion.

— London newsroom: 00 44 20 7862 7494; e-mail: nshamim@marketnews.com

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