Macedonia postpones €650mn Eurobond issue after legality challenged

By bne IntelliNews July 15, 2016

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.

Related Articles

DUI leader keeps options open as coalition talks begin in Macedonia

The leader of Macedonia’s ethnic Albanian Democratic Union for Integration (DUI), Ali Ahmeti, said on January 11 that his party will negotiate with the conservative VMRO-DPMNE on the formation ... more

Macedonia’s ethnic Albanian parties set conditions for joining new government

Three ethnic Albanian political parties in Macedonia adopted a joint platform on January 7 asking for more rights as a prerequisite for their participation in the new coalition government, one of the ... more

Re-vote confirms VMRO-DPMNE victory in Macedonia election

Macedonia’s conservative VMRO-DPMNE party has retained its election victory, as the re-run in the municipality of Tearce on December 25 failed to change the election outcome.  If no ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss