Serbia borrows around EUR 3 billion through bonds – Great interest from American and European investors

The Republic of Serbia today realized another issue of government bonds, with great interest from American and European investors, the Ministry of Finance announced.

This time, as stated by the Minister of Finance Sinisa Mali, Serbia recorded a very high demand in the amount of more than EUR 8 billion.

– Investors invest in this type of securities when they believe in the long-term stability of the country, which tells us that the financial picture of Serbia in the world has changed drastically over the last decade – Mali assessed.

He emphasized that for the first time the issue was realized in three tranches and in two different currencies.

– The first tranche, in the amount of EUR 1 billion, maturing in 2031 and with a coupon rate of 4.25%, will be used for the early redemption of bonds maturing next year. The second tranche, in the amount of EUR 900 million, maturing in 2038 and with a coupon rate of 4.875%, represents another in a series of “sustainable” bonds of Serbia. This green bond is particularly important, given that the funds raised through this issue will be used exclusively to finance green projects, such as improving the railway infrastructure, purchasing trains, the Belgrade Subway project, and others. The rest of the funds raised through the third tranche will also be used for large capital projects within the national strategy “Serbia 2030” – Mali pointed out.

As for the last tranche in the amount of USD 1.25 billion, it matures in 2036. The Ministry of Finance today implemented a financial hedging operation, replacing the dollar coupon rate with a coupon rate in euros of 4.66%.

– By early redemption of bonds maturing in 2027, we are actively managing public debt and further strengthening the stability of public finances. We are particularly committed to investing in “green” projects that stimulate sustainable and inclusive economic growth – he said.

Mali pointed out that during the auction, the price was reduced by 30 basis points compared to the initial rate, which, he assessed, is a very good result in the current conditions on the capital market, which are characterized by increased uncertainty and changing financing conditions.

The issue, as he explained, is in line with the planned dynamics of financing large infrastructure projects in Serbia, and also in line with the public debt projection, which for the end of this year is 44.5%.

– Our projection will be adhered to. We strictly monitor the level of public debt because we need the stability of public finances in the current global crises. Our public debt at the end of February amounted to 41.5% of GDP, which is half the public debt of the eurozone, which is around 89% – Mali pointed out.

The minister states that with this transaction, Serbia is further strengthening its resilience to external risks and ensuring stable sources of financing.

Ministarstvo finansija Republike Srbije

Ministry of Finance

Siniša Mali

issue of government bonds

government bonds