Last week, Latvia received a loan of 600 million euros in the international financial markets, according to the information published by the State Finance Department.
On Tuesday, September 17, the State Treasury issued seven-year Eurobonds in the international financial markets on behalf of Latvia in the amount of EUR 600 million. The bond’s maturity date is January 24, 2032. The bond yields 3.138% and the coupon rate is 3%.
Investor demand for Latvian bonds has reached a historically high level – nearly five billion euros, notes the State Treasury.
Also, the number of investors was one of the largest – 140 investors bought from various European countries, including Germany, Austria, Great Britain, Ireland, the Scandinavian countries, and the Switzerland, securities.
The main banks of the case were “BNP Paribas”, “Deutsche Bank” and “Erste”.
The State Finance Manager Kaspars Āboliņš said in an interview with the LETA organization in September this year that the state must borrow at least three billion euros per year for the next four years, as a series of Eurobonds that were previously refinanced. , as well as financing the budget deficit and loans to municipalities.
“The need for loans in the coming years is very large, because it is necessary to borrow not only to refinance Eurobonds, but also to finance the budget deficit and loans to municipalities. three billion euros per year, of course, it also depends on what kind of budget deficit will be approved in the end, how tax revenues will be achieved,” said Āboliņš.
He explained that it is planned to attract this money with different instruments, but mostly it will be bond issues in the international financial markets in euros or US dollars, similar to what the State Treasury did this year.
Previously, Latvia received a loan in the international financial markets in May 2024. Latvia issued 10-year bonds in the amount of 1.25 billion US dollars, returning to the US capital market after a 12-year break . Bonds maturing on July 30, 2034 were priced with a credit risk premium of 83 basis points above the benchmark or US Treasury bonds, with a yield of 5.252% and a coupon rate of 5.125%.
To prevent currency risk, currency exchange transactions were terminated at the same time as the bond issue, changing the state’s real debt obligations to euros.
2024-09-23 14:50:37
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