The Ministry of Finance has issued ten-year bonds on the domestic market amounting to 2.5 billion kuna, announced Privredna banka Zagreb (PBZ), one of the arrangers of this issuance.
Along with PBZ, the arrangers of the issuance are Erste&Steiermaerkische Bank, Raiffeisenbank Austria, Societe Generale-Splitska banka, and Zagrebačka banka, while the syndicate of banks in the primary market also includes Hrvatska Poštanska Banka and Hypo Alpe-Adria-Bank as co-arrangers. The maturity date of the new government bonds is February 8, 2017, the interest rate is 4.750 percent per annum, the yield of the issuance is 4.91 percent, and the issuance price is 98.748 percent. The bonds will be listed on the first quotation (Official Market) of the Zagreb Stock Exchange as well as in the depository, clearing, and settlement of the Central Depository Agency.
The issuance has been almost entirely placed on the domestic market to institutional investors, whose demand for the new bonds fully satisfies the total offered amount of the issuance, the statement said. PBZ states that the Ministry of Finance, in order to stop the growth of external debt initiated by the issuance of government debt, decided to issue another kuna bond issuance, this time ten-year, with the aim of further strengthening the kuna yield curve and the domestic market.
The government made the decision to issue a new series of government bonds at the beginning of February, and Finance Minister Ivan Šuker announced at that time that around 850 million kuna would be spent on repaying the principal of foreign and domestic debt, with part allocated for agricultural subsidies. Namely, along with the 250 million kuna in subsidies that the Ministry of Agriculture has already paid out by March of this year, just over one billion kuna will be paid out, Šuker said at that time. (H)
