Exclusive: Lithuanian Treasury Head Kavolytė: Frontloading Issuance Due to Elections

4 April 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – The Lithuanian Treasury is frontloading issuance, as the upcoming elections are limiting favourable conditions for bond issuance, according to Rasa Kavolytė, Director of the Lithuanian State Treasury Department.

In a recent interview with Econostream (transcript here), Kavolytė said that the 2024 election season in Lithuania meant that there were ‘less issuance windows’. A similar tendency can be seen regarding the U.S. elections, she said.

‘The [Lithuanian] Treasury is consciously planning for that and frontloading issuance in the international markets’, she said.

Asked if there were further syndication plans this year, Kavolytė said that one more syndication would most likely happen before the summer break.

Regarding issuing bonds in other currencies, she assured that there were no plans to do that so far.

With respect to the share of foreign demand for Lithuanian government debt, Kavolytė noted that it was sufficient, ‘but [we] are planning to increase our marketing efforts and work towards a larger investor base’.

Asked about the implications of interest rate cuts in the euro area for Lithuanian government debt issuance, she pointed out that higher volatility might be one of the risks.

‘[I]f market expectations and the ECB's decisions will not align, there is also an expectation of investors wanting to go further along the curve once the yields begin to drop in the short term’, she said.