Agreement between insurance companies and Government on purchase of eurobonds worth 200 million euros

Nebojsa Divljan

Nebojsa Divlja, the Director General of Delta Generali insurance company, said that the life insurance industry in Serbia was close to reach an agreement with the Government of Serbia on the purchase of long-term government bonds in euros, worth 200 million euros.

- Life insurance is one of the forms of money saving and, before an external debt is made and the development needs are satisfied from the sale of state-owned property, some other potentials should be used as well - Divljan assessed.

State Secretary in the Ministry of Finance Slobodan Ilic announced at the beginning of the previous week that the Government should made the decision within next few weeks on the issuance of 200 million euros worth of long-term government bonds in euros, with the maturity period of 15 years and the fixed interest rate of 5.9%. Ilic pointed out that those bonds would be directed at the life insurance industry since those companies had the obligations in euros and collected life insurance policies in that currency.

Ilic emphasized that insurance companies would not buy the bonds for the whole sum right away, but successively by the end of 2011, as well as that the arrangement with the life insurance industry envisaged guarantees that insurance companies would buy all 200 million euros worth of bonds.