Lithuania

Lithuania was on track to print a tightly priced reopening of its 2035s on Thursday morning with bankers estimating a 4bp–13bp premium at initial price thoughts.

Lithuania is lining up its first trade of 2016 and has picked two banks to lead a tap of its euro 2.125% 2035s.

Central and eastern European sovereign bond issuers can more and more rely on rates investors to come into their bond deals. But many of these borrowers are still handled by investment banks’ emerging market teams. So when is an issuer SSA rather than EM?

Lithuania plans to stay out of what has been a tough opening for central and eastern European sovereigns, as many of the issuers — now considered to be SSAs — suffer a problem many of their western European peers have been dealing with for a year.

Lithuania landed its longest, largest and lowest yielding deal ever in one fell swoop this week. But with the eurozone sovereign’s order book dominated by rates buyers rather than emerging market accounts, the deal has implications for Spain just as much as Slovenia.

Lithuania has loosed 10 and 20 year euro tranches on the market, demonstrating confidence in duration as the prospects of an imminent US rate hike fade away yet again.

The Republic of Lithuania on Friday threw out the first fresh mandate after a monster week for CEEMEA supply, and is looking at a long dated euro deal.

Plans by the European Central Bank to trial the use of reverse auctions in its public sector purchase programme have been tentatively welcomed by SSA issuers on the central bank’s buying list.