Euro Bonds Repurchase Prompts a 1.8 Billion Kuna Loan

Total Croatia News

The 300 million Euro issue is being bought off a year ahead of its maturity, through domestic refinancing

The Zagreb Holding should present this week details on the refinancing of their only issue of Euro bonds, amounting to 300 million Euro or 2.2 to 2.3 billion Kuna. This debt, originally due in the beginning of July next year, has been under consideration for refinancing for a while, as well as the way to do it, Poslovni Dnevnik reported on June 28, 2016.

According to unofficial information, the refinancing will take place in the domestic financial market, while the official announcement on the details of the 2007 bond (with a 5.5% interest) and new arrangement is expected on Thursday. Market players claim the new loan to refinance the bonds will be slightly smaller, in Kuna.

It is predicted that the Zagreb Holding plans for a new loan of 1.8 billion Kuna. Will this also mean the lowering of the total debt amount, depends on the state of repurchase of the existing one. The finance circles say that along with domestic industry, the European Bank for Reconstruction and Development might join investors. This remains to be seen, as are details of the arrangement and deadlines. In that sense there are signs the structure of domestic demand might impose five to seven years. Due to discretion rules and investment sensitive information of such market operations, the Holding is silent.

Whatever the case, the Holding leadership hired as consultants Zagrebačka and Privredna banks for support in analysis and choice of optimal model for refinancing long term commitments. They have mentioned hiring other consultants as needed. Though, at the time the option of new loans on the international market was available. The total annual income of the Zagreb Holding Group are approximately 5.5 billion Kuna.

The domestic financial market next week should be marked by refinancing. As on July 22nd the state is due 3.5 billion Kuna in loans, preparations for refinancing are in full swing. Although there were signs the new issue might be significantly higher than the amount due, as well as two series, of five and ten years, it seems the amount will be four billion Kuna and five years, fitting for banks.


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