Page 16 - bne Magazine February 2023

16 I Companies & Markets bne February 2023
bne:Funds
Southeast Europe sovereigns start 2023 with return to capital markets
bne IntelliNews
Serbia became the latest country from emerging Europe to tap the international capital market on January 19, raising $1.75bn with two heavily oversubscribed dollar- denominated eurobonds.
Serbia followed Slovenia to the market, where the other Southeast European country issued a 10-year sustainability bond worth €1.25bn on January 4. Slovenia was the first country in the region to enter the capital market in 2023.
Other countries including Albania and Bulgaria are understood to also be preparing for bond issues early in 2023, in anticipation of an increase in yields later in the year.
Serbia records record-high investor interest
Serbia’s Finance Minister Sinisa Mali said investor interest in the January 19 offer was at a record high for Serbian bonds, with the demand six times higher than the offer, at $11bn,
a government statement said.
“More than 500 respectable investors from all over the world have shown interest in our securities,” said Mali, attributing this to Serbia’s solid economic results.
During the issue process, due to high demand, the Ministry of Finance managed to reduce the yield compared to the initial offer, the government said.
New bonds with a maturity of five years were issued in the amount of $750mn at a coupon rate of 6.25%. Ten-year bonds were issued in the amount of $1bn at a coupon rate of 6.5%.
Mali commented that “Serbia achieved an excellent interest rate, especially considering that on the capital market our country fared similarly to Hungary, which is a member of the European Union and has an investment rating, and better than Romania, which also has an investment rating and is a member of the EU.”
Belgrade decided to issue the bond at the start of the year in anticipation of further growth of yields on the international market.
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Mali commented that “the global crisis, the conflict in Ukraine and energy instability are raising the price of money on the market, so we will have to wait for the end of this crisis in order to reach the 2% interest rates that were available to us in 2021.”
The funds will be used to maintain financial stability and support economic growth.
Slovenia gets away second sustainability bond
Slovenia, meanwhile, raised €1.25bn with its second sustainability bond, with a coupon of 3.625%, as announced by the finance ministry. Inflows from the bond are intended to finance investments that support environmental and social goals.
At the same time, Slovenia expanded the outstanding Eurobonds due in August 2045 by additional issue of €250mn with a coupon 3.125%.
The ministry said that the total demand for the sustainability bond issue due on March 11, 2033 exceeded €10bn.
Previously, the government mandated BNP Paribas, Citi, Deutsche Bank, Erste Group, Nova KBM and UniCredit to organise meetings with investors on January 3 to present the bond issue.
Slovenia issued its first 10-year sustainability bond of €1bn at the end of June 2021. The coupon rate of the issue was 0.125%.
Romania issues $3.75bn of FX bonds
Romania plans more Eurobonds this year, and is considering Samurai issues. The country needs to borrow RON160bn (€32bn, over 10% of GDP) from the domestic and foreign markets to finance the budget deficit and refinance previous debts.
Romania issued $3.75bn of FX bonds with maturities of five, 10 and 30 years on January 7, as the first move. The finance ministry initially announced a target volume of up to $4bn and said that part of the money would be used to redeem in