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ARDAL: 2009 Was Good Year in Terms of Debt Management
Monday 28 December 2009 Zoom in | Print page
Bratislava, December 28 (TASR) - It is possible to evaluate 2009 as a good year for the management of the state debt, TASR was told by Tomas Kapusta from the Debt Management and Liquidity Agency (ARDAL) on Monday.
"Due to the crisis, interest rates fell in all their maturity scope and despite an increase in risk fees it's possible to say that Slovak obligations were being sold with lower interest rates than in the previous period," said Kapusta.
Slovakia's accession to the eurozone along with European Central Bank (ECB) measures meant that there was enough liquidity on the market during the year, resulting in the highest ever demand for Slovak obligations.
In line with the state financial strategy, the costs of state debt management aren't changing despite the growing level of debt, said Kapusta. Mature obligations with high interest-rate coupons are being replaced by new lower-interest ones, and therefore interest costs have remained at approximately the same level since ARDAL was set up in 2004.
The main reason for lower interest rates is the way that countries have intervened against the financial crisis. Virtual money from toxic assets was made real by the support of state financial injections in banking institutions, and the surplus of money on the market created in this way influenced a drop in inter-bank rates also in the state obligations sector.
"At the same time, the risk margin was raised as well, so the advantage of low interest rates can now be really appreciated only by debtors with the highest level of solvency. As for debtors outside of rating or bank evaluations, the margins increased to such an extent that the interest rates of their liabilities are higher almost throughout the entire scope of the yields curve," said Kapusta.
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