Serbia Incurs Debt of EUR 1 Billion – Country’s New Success in Capital Market, Mali Claims

Serbia has for the first time issued twelve-year government bonds denominated in euros in the international capital market in the amount of EUR 1 billion, the Ministry of Finance announced and added that the money would be used to repay “some old and expensive debts”.

Due to the great demand, which reached EUR 3.5 billion, the delegation of Serbia managed, as said, to reduce the initial interest rate by 35 base points and issue bonds at a yield rate of 1.920% and a coupon rate of 1.65%, with a maturity date of 12 years.

– This transaction continues Serbia’s successes in the capital market – Serbian Finance Minister Sinisa Mali claims and notes the favorability of the interest rates, “achieved in the conditions of uncertainty in the market, while the coronavirus pandemic is ongoing”.

He adds that the investors have continued showing trust in the structural reforms carried out by the Government of Serbia and that a demand of over EUR 3.5 billion was achieved, coming from over 200 respectable funds, insurance companies and banks, primarily those from Europe and America.

– We are very satisfied with the response of the investors and today’s issue of Eurobonds, which we will use to repay some old and expensive debts that are due this year – Mali and added that a debt of USD 700 million based on a bond with a coupon rate of 7.25% was due in September.

He added that the share of the public debts in the GDP had been 52.9% one day before the issue, which was “lower than at the beginning of the epidemic”, and announced that Serbia would not increase the public debt by the end of the year to a greater extent.

He also said that, considering that a further growth of the yield rates in the international markets was expected, Serbia had been ready to use the most favorable conditions, in other to obtain the necessary funds to repay the debts due in 2021.