PM Plenkovic: Talks under way to refinance road sector's EUR 1.3 bn debt

Prime Minister Andrej Plenkovic said on Thursday that negotiations were being held with investors in London to refinance about 1.3 billion euros of debt owed by the road sector in order to extend the maturity and lower the interest rates, so that the sector's consolidation could continue.

Finance Ministry officials led by Minister Zdravko Maric are on a tour of European cities this week meeting with investors to discuss refinancing of the road sector's debt, which totals about 5 billion euros, by issuing a euro-bond.

"Talks are under way in London to extend the maturity and lower the interest rates for loans which amount to approximately 1.3 million euros, which fall due soon and have unfavourable interest," Plenkovic said at the start of a cabinet meeting.

The PM noted that in talks like these investors usually first ask questions about the situation in the country, about its stability, the reliability of the government, and whether the economic policy and fiscal consolidation are agreed with the European Commission. He recalled that the Commission has recently revised up its projection of Croatian growth for 2017 to 3.2 percent.

Plenkovic said that all these circumstances "are not visible at first glance but are much more important than the failed initiatives we have seen in the past week," alluding to an opposition motion for a no-confidence vote in the government which did not receive support in parliament last Friday.

"I am confident that the talks which Minister Maric and his associates have conducted in London, Frankfurt, Milan and Amsterdam, and again in London today will result in quality refinancing of this debt and further consolidation of the road sector, without resorting to monetisation which was discussed a few years ago by the same promoters of last week's initiative who apparently care about the country's financial reputation," the PM concluded.

Bank analysts have said that the euro bond issue would have a maturity of between 12 and 15 years and a yield of between 2.89 and 3.3 percent, and that it may be issued already later this week.

Finance Ministry officials led by Minister Zdravko Maric are on a tour of European cities this week meeting with investors to discuss refinancing of the road sector's debt, which totals about 5 billion euros, by issuing a euro-bond.

"Talks are under way in London to extend the maturity and lower the interest rates for loans which amount to approximately 1.3 million euros, which fall due soon and have unfavourable interest," Plenkovic said at the start of a cabinet meeting.

The PM noted that in talks like these investors usually first ask questions about the situation in the country, about its stability, the reliability of the government, and whether the economic policy and fiscal consolidation are agreed with the European Commission. He recalled that the Commission has recently revised up its projection of Croatian growth for 2017 to 3.2 percent.

Plenkovic said that all these circumstances "are not visible at first glance but are much more important than the failed initiatives we have seen in the past week," alluding to an opposition motion for a no-confidence vote in the government which did not receive support in parliament last Friday.

"I am confident that the talks which Minister Maric and his associates have conducted in London, Frankfurt, Milan and Amsterdam, and again in London today will result in quality refinancing of this debt and further consolidation of the road sector, without resorting to monetisation which was discussed a few years ago by the same promoters of last week's initiative who apparently care about the country's financial reputation," the PM concluded.

Bank analysts have said that the euro bond issue would have a maturity of between 12 and 15 years and a yield of between 2.89 and 3.3 percent, and that it may be issued already later this week.

Text: Hina

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