Croatia considers new Eurobond issue later in 2014 – FinMin

By bne IntelliNews May 28, 2014

Croatia might launch a new Eurobond issue later this year, if the market conditions remain favourable, in order to cover its financing needs that will occur in the beginning of 2015, news service Banka.hr quoted finance minister Boris Lalovac as telling Bloomberg.

Last week, Croatia sold EUR 1.25bn worth of Eurobonds maturing in 2022 at a yield of slightly above 4%. Lalovac said demand for the Croatian Eurobonds was four times above the offering, most likely because investors anticipate a further easing of the monetary policy of the European Central Bank.

Lalovac added the big interest in the Croatian debt was due to the country's recent EU entry and the expected long-term benefits from it.

Previously, Croatia last issued abroad ten-year bonds worth USD 1.75bn in November 2013. It also issued seven-year euro-denominated Eurobonds on the international markets in 2011 when it raised EUR 750mn. 

Croatia plans this year revenues of HRK 26.4bn from issuing government debt, out of which HRK 1.65bn are planned from issuing T-bills (on the domestic market) and HRK 24.76bn from issuing bonds at home and abroad.

Lalovac dismissed any plans for international financing aid. He said the government will pursue instead the sale of state-owned companies, including Hrvatska Postanska Banka (HPB) and fertilizers producer Petrokemija. Croatia rejected  the sole binding bid placed by Erste Bank for a 99.13% stake in HPB last year as the offered price was low. Lalovac said the country will renew the sale of the lender before the end of the year.

Croatia’s government is under pressure to cut its fiscal gap after entering the EC's excessive deficit procedure in January. The country is in a sixth consecutive year in recession in 2014.

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