Bosnias Serb Republic to auction EUR 15mn in 7-yr bonds.

By bne IntelliNews April 9, 2012
Bosnias Serb Republic will offer seven year bonds worth BAM 30mn (EUR 15mn) to investors on the Banja Luka Stock Exchange later this month, the Republics finance ministry said in a bourse filing. A total of 300,000 securities at BAM 100 par value each and a fixed annual interest rate of 6% will be offered for subscription between April 20 and April 23. Last month, the Republic placed 76% of a bigger BAM 35mn offer of six-month Treasury bills. The demand totalled BAM 40.4mn but the average accepted price was equal to 98.27% of par, or a 3.5% yield, up from the discount price of 98.35% of par (or a 3.36% yield) accepted in the previous T-bills auction held in December. The Republic is one of the two autonomous parts that make up Bosnia. The other one is the Muslim-Croat Federation. The governments of the two entities have been increasingly relying on the domestic debt market to finance their budgets after Bosnias cheap international financing was put on hold at the end of 2010. The lack of state-level government for more than 15 months following the October 2010 elections, as well as the countrys inability to meet fiscal criteria on its IMF deal have resulted in Moody's downgrading Bosnias government bond rating to B3 from B2 last week. Furthermore, Moodys said it has started a review for a possible further rating cut. .

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