The Ministry of Finance Announces Final Terms for the Issuance of Two Bonds – Three-Year and Ten-Year

On Wednesday, the Ministry of Finance announced the final terms for the issuance of two bonds – a three-year bond amounting to 750 million euros, of which 158.3 million euros were contributed by citizens, achieving a yield of 3.3 percent, and a ten-year bond with a nominal amount of 1.25 billion euros, exclusively involving institutional investors.

– The Republic of Croatia, represented by the Ministry of Finance, successfully executed the issuance of bonds maturing in 2027 with a nominal amount of 750 million euros aimed specifically at individuals and institutional investors, as well as bonds maturing in 2034 with a nominal amount of 1.25 billion euros – announced the Ministry of Finance on its website.

The three-year bond is also referred to as a “people’s” bond because citizens could participate in its issuance this time as well. Of the targeted nominal amount of the issuance of 750 million euros, citizens contributed 158.3 million euros, while the remaining 591.7 million euros were allocated to institutional investors.

– To avoid any doubt, all individual investors who validly subscribed and paid for the bonds in accordance with the public call were allocated the full amount of the bonds – it is noted in the announcement from the Ministry of Finance.

The interest rate of 3.3 percent per annum at which the new bonds will be issued is higher than previously announced in the public call for subscription, which anticipated a minimum interest rate of 3.10 percent per annum.

6,457 Citizens Subscribed to Bonds; Average Contribution 24,515 Euros

Let us remind you, citizens could subscribe to state bonds from July 1 to July 8, with a minimum investment of 500 euros, and as reported by the Ministry of Finance, 6,699 citizens subscribed to the bonds, of which 6,457 made payments. The average contribution amounted to 24,515 euros.

Today, July 10, the subscription for institutional investors was opened and closed, with subscriptions amounting to as much as 2.1 billion euros, and they will be allocated the aforementioned amount of 591.7 million euros.

Each individual institutional investor will be informed of the exact allocation amount via email from the lead agents, it is stated. The lead agents for the issuance are Erste&Steiermärkische banka, Hrvatska poštanska banka, OTP banka, Privredna banka Zagreb, Raiffeisenbank Austria, and Zagrebačka banka.

In just over a year, this was the fifth issuance of state securities that citizens could purchase, of which the second was state bonds. Let us remind you, from February 22 to March 1 last year, around 45,000 citizens invested 1.34 billion euros in two-year “people’s” bonds.

Interest in the 10-Year Bond 1.59 Billion Euros

The Ministry of Finance today executed the issuance of the ten-year bond with a nominal amount of 1.25 billion euros.

The interest of institutional investors for the bonds maturing in 2034 was 1.59 billion euros, with a dominant interest from pension funds and commercial banks. The bonds maturing in 2034 will yield investors a yield to maturity of 3.60 percent and an annual interest rate of 3.50 percent, it is stated.

– The level of investor interest enabled the Issuer to finance under competitive market conditions, further affirming the status of the Republic of Croatia as an attractive issuer in the domestic capital market – stated the Ministry of Finance.

The issuance date, or the listing of the bonds in the services of the depository, settlement, and clearing of the Central Clearing Depository, is July 12, 2024. The listing of the bonds on the Official Market of the Zagreb Stock Exchange is expected by July 15 of this year.