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Austria plans to hold borrowing steady next year, debt agency says
December 14, 2016 / 5:28 PM / a year ago

Austria plans to hold borrowing steady next year, debt agency says

VIENNA, Dec 14 (Reuters) - Austria plans to hold its borrowing steady next year and keep the amount of government bonds issued at around two thirds of the total, the country’s Federal Financing Agency said on Wednesday.

The total amount of borrowing will be 30 billion euros to 33 billion euros ($32 billion to $35 billion), the same as its latest prediction for this year, the agency said in its funding outlook for 2017.

“It is really identical to the forecast for this year,” the head of the agency, Markus Stix, told Reuters by telephone.

The agency increased its forecast for this year in October due to extra costs of up to 9.3 billion euros linked to a settlement with creditors of “bad bank” Heta Asset Resolution .

As a sweetener to that deal, Heta creditors had the option of receiving a bond issued by the province of Carinthia and guaranteed by Austria. They can sell those top-up bonds back to Carinthia within a 180-day window that started on Dec. 1, with Austria lending Carinthia the money to cover that buyback.

Because that window stretches into next year, Stix said he could not give a more accurate prediction for borrowing in 2016. The remaining buybacks are being funded as they occur, through treasury bills and short-term loans, he said.

“We cannot say anything yet on the final amount (of borrowing) for this year as we have buybacks every day,” Stix said, sticking to the October forecast of 30 billion to 33 billion euros.

He also declined to give any indication of the amount of buybacks that have taken place so far.

The amount of government bonds issued in 2016 was, however, clear, since the last auction has been held. The total for this year is 22.9 billion euros, the outlook said, adding that next year’s total would be 20 billion to 22 billion euros.

The agency also plans to hold one or two syndicated debt issues next year, Stix added. ($1 = 0.9384 euros) (Reporting by Francois Murphy; Editing by Alison Williams)

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