Serbia has raised €2bn from a seven-year Eurobond issue, which will be listed on the London Stock Exchange, the finance ministry said in a statement on May 11.

The government has adopted a €5.1bn package to support the economy amid the coronavirus (COVID-19)-related crisis and has refused to borrow from the International Monetary Fund and the EU. The funds from the Eurobond issue will be used to finance the stimulus measures.

“Serbia is the sole European country that went out on international markets during the time of the COVID-19 pandemic without the help of the European Central Bank in the sale of the bond,” the ministry said in the statement.

The securities carry a 3.125% coupon. More than 300 investors bid for the bonds, placing offers for €7bn. Thanks to the high investor interest, Serbia was able to lower the cost of borrowing by 0.5pp.

“Investors have shown that Serbia reacted well in the time of the coronavirus pandemic and took the respective economic measures that would help the economy to overcome this period and resume the economic growth,” the finance ministry said in the statement.

Serbia’s general government public debt stood at €24.31bn at end-March, equalling to 51.9% of the projected end-year GDP.

"Serbia’s gross financing needs in 2020 stand at RSD886.2bn and besides Eurobonds, government plans to secure funding via local debt issuance (RSD455bn), loans (RSD71.2bn) and sale of state’s real estate (RSD5.8bn). Debt accumulation will lead to public debt soaring to 59.8% of GDP, wiht the deterioration being one-off effect driven mainly by financing needs to combat the virus impact on the economy," Raiffeisen analysts wrote.