Macedonia to issue Eurobond in 2017 if conditions are "extremely favorable"

By bne IntelliNews January 18, 2017

Macedonia sees no need to issue a new Eurobond issue in 2017, but this may happen if the circumstances on the international money market are extremely favorable, bne IntelliNews has learned from the finance ministry. 

According to central bank data, Macedonia's gross external debt soared by 19.3% y/y to stand at €7.5bn at the end of the third quarter of 2016. The external debt has been constantly rising since 2007, but begin to increase rapidly as of the beginning of 2016. The debt has risen mostly due to the new €450mn Eurobond issue sold in July 2016, the central bank said recently."

“The domestic capital market is very liquid and provides access to inexpensive capital so there is no necessity of issuing Eurobonds to cover the deficit,” the finance ministry said in a statement sent to bne IntelliNews on January 18.

According to the ministry, if market conditions are exceptionally favorable and an issue takes place, the funds will be used for financing liabilities due in 2018.

“We are monitoring the situation on the international market,” it added.

Macedonia is rated at 'BB-' with stable outlook by Standard & Poor's and at 'BB' with negative outlook by Fitch.

In July 2016, Macedonia placed a seven-year €450mn Eurobond to finance the budget gap this and next year. The coupon rate was 5.625%.

However, the issue was marred by controversy as the issue was postponed on July 14, following an objection by a member of the opposition Social Democratic Union of Macedonia (SDSM) party, who questioned the legality of the issue.

The Eurobond sparked a mass protest in the capital of Skopje on July 11, supported by the SDSM, which has criticised the government for its huge borrowing on the local and the international money market. The issue was re-launched several days after the postponement and Macedonia managed to raise only €450mn instead €650 as initially planned.

The finance ministry claimed at the time that the issue was completely legal and made in consultation with the justice ministry.

Macedonia also tapped international 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

Hungary finally joins the negative yield club

Hungary finally joined the negative yield club on March 21 as Government Debt Management Agency AKK  accepted a bid of -0.01% at an auction of 3-month T-bills. Hungarian yields have been on ... more

S&P improves Russia's outlook to Positive

Standard & Poor's improved the outlook on Russia's sovereign ratings from Stable to Positive, while affirming the 'BB+/B' foreign currency rating and 'BBB-/A-3' local currency rating, the agency ... more

IMF delays new $1bn tranche to Ukraine due to Donbas blockade

Ukraine's main donor, the International Monetary Fund (IMF), has cancelled a board meeting scheduled for March 20 that was expected to see the release of a $1bn tranche to Ukraine, while demanding ... 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