ZAGREB, June 11, 2020 – Finance Minister Zdravko Maric said on Thursday the new euro bond issue met with big interest among investors and that they recognised Croatia’s successes in the affirmation of the investment credit rating, drawing closer to the euro area and the fight against COVID-19.
Speaking to the press, he said investors’ interest in the new bond was 4.2 times bigger than the issue, i.e. €8.4 billion. “I can’t remember such a big interest among quality investors across the world.”
That means that “several big and important houses recognised what was done and what is being done in Croatia” and that “our image has been affirmed in international financial circles,” said Maric.
The new euro bond will be used to refinance a dollar bond which was issued ten years ago and is due on July 10, and its interest of 6.6% is replaced with 1.5%, which is a considerable saving, he said.
The Finance Ministry on Wednesday issued an 11-year €2 billion bonds on the international capital market at 1.5% interest and 1.643% yield. The issue was arranged by Banca IMI/Privredna Banka Zagreb, Barclays, Deutsche Bank, and J.P. Morgan.
The investment community’s interest was exceptional, with more than 400 potential investors, which was helped by investors who invest only in investment credit rating securities, the ministry said today.
The revenue from the issue will be used to refinance a US$ 1.25 billion euro bond due in July. Nearly HRK 360 million will be saved on interest annually. The rest of the issue will be used to finance government aid for businesses affected by the COVID-19 pandemic, as envisaged in the revised 2020 budget.