Croatia issues 1.275 billion euro-bond at best interest rate ever

Croatia on Thursday issued 1.275 billion in a euro-bond which will mature in 2030 and which has a yield of 2.953% and a coupon rate of 2.75%, which is the most favourable loan ever, the Finance Ministry has reported, saying that the money will be used to repay and refinance the road sector's debts.

"The Republic of Croatia today issued 1.275 billion in the euro bond which matures in 2030 and has a yield of 2.953% and a coupon rate of 2.75%, which is the most favourable and longest maturity issue ever achieved on international capital markets," the ministry said in a press release.

The leading agents for the issue are Banca IMI/Privredna Banka Zagreb, Barclays and J.P. Morgan. 

"With the ministry having strategically selected a favourable moment for the issue, considering the recently release data on GDP growth and the decrease in public debt and favourable market trends, the transaction to issue the euro-bond was conducted with exceptional success," the ministry said.

The ministry said the outstanding investor interest was proven by the fact that the book of entries was closed within one day with interest shown by 226 investors in about 3.38 billion euro.

The ministry added that the bond was issued without any premium on a new issue, which is usual practice when funds are collected on foreign capital markets.

The demand for the bond was quite widely geographically dispersed, with most of the demand coming from Central and Eastern European countries - Italy, the United Kingdom, Austria, German, the Benelux countries and elsewhere.

"The funds collected with this issue will be used for the early payment and refinancing of loans taken by the HAC, ARZ and HC road sector companies, which involve state guarantees," the press release said.

The total debt of the road sector is currently about 5 billion euros.

This is the second issue this year, following one in March for a 10-year euro-bond valued at EUR 1.25 billion with a yield of 3.2% and a coupon rate of 3%.

Text: Hina

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