Macedonia has postponed its seven-year Eurobond issue after a member of the opposition Social Democratic Union of Macedonia (SDSM) questioned the legality of the issue.

The news came shortly after Reuters reported that Macedonia started marketing the Eurobond at an initial yield of around 5%. The Eurobond sparked a mass protest in the capital of Skopje on July 11, supported by the SDSM, which has criticised the government for huge borrowing on the local and the international money market.

The issue was delayed after a letter from a SDSM member, claiming that Macedonia may not have proper legal authority to issue the notes, Reuters reported quoting a statement from one of the lead managers. Lead managers of the new Eurobond are Citigroup, Deutsche Bank, Erste Group and SG CIB.

The SDSM claims the bond issue would violate various Macedonian laws and regulations, a party statement said.

The Macedonian ministry of justice and the joint lead managers' Macedonian counsel will issue customary legal opinions confirming the authorisation and validity of the issuance of the notes, according to an email cited by Reuters.

The lead managers counsel have also advised that "the positions asserted in the correspondence are without merit and that the Republic is duly authorised to proceed with the offering."

"The delay confirms that all arguments that the issue is illegal and detrimental to the citizens and the economy are true," the party said.

The finance ministry said on July 8 the government planned to issue an Eurobond worth up to €650mn with a maturity of up to ten years to patch the budget gap and repay old debts. 

Macedonia last tapped international debt markets in November 2015, when it raised €270mn through the sale of a five-year Eurobond at yield of 5.125%. In July 2014, the country also sold €500mn worth of seven-year Eurobonds.