A delegation from the Croatian finance ministry, headed by minister Zdravko Maric, will carry out a series of international roadshows this week in order to issue a Eurobond to refinance debts in the road and highways sector, jutarnji.hr reported on November 13.

This would be the second Eurobond issue this year, after the country sold €1.25bn worth of 10-year Eurobonds with an actual yield of 3.20% and a coupon rate of 3% back in March. Improving macroeconomic performance during 2016 and restored political stability has been supporting the outlook for the Adriatic country’s borrowing performance this year. 

The representatives of the finance ministry are going to meet investors in London, Frankfurt, Milan, Amsterdam and Munich to see if Croatia’s debt in the road sector can be solved without motorway monetisation, Prime Minister Andrej Plenkovic said.

After massive investments in infrastructure in the past 20 years, state-owned companies Hrvatske ceste (HC), Hrvatske autoceste (HAC), and Rijeka Zagreb motorway (ARZ) now have €5.2bn in debt, or more than 13.5% of the public debt.

“We have met most of the government budget commitments in the first half of the year and have space to focus on the segment of highways and roads, of which we have quite a lot of expectations. We must make efforts in this segment in order to put it on sustainable fiscal grounds and to make their business sustainable,” the Croatian finance minister has said.

Analysts expect the issue to have a maturity of 12 to 15 years. It is expected that the bond would be issued at the end of the week.

“Athough the size of the deal was not announced we believe that the transaction will be in the benchmark size of around €1bn to €1.5bn,” RBI analysts said in a note.

“We believe that the issue will attract strong demand from investors since Croatia’s EUR segment still offers fewer long-dated paper while the transaction clearly aims at institutional “buy & hold” accounts and would add liquidity and duration,” RBI added.