Finance Minister, Zdravko Maric, said on Monday that he planned to refinance a government bond valued at 6 billion kuna (€814 million) before the end of the week, in an effort to achieve an additional saving on interest.

The preparations to issue a new kuna-denominated bond is going well, and the plan is to finalise that process this week, Maric told reporters on the margins of a conference organised about the future of the tax and pension systems. According to Maric, the interest shown by the domestic finance industry is “pretty big and strong.”

Asked by reporters when the bond would be issued exactly, Maric said that in any case it was planned to happen before the July 10 maturity date.

“However, naturally, we always have alternative scenarios prepared. I think that I have shown quite well that as far as conditions on the international market are concerned, I am fairly pragmatic,” he said, and added that the best possible conditions are sought after, for the state budget and taxpayers, with the lowest interest rates.

He added that the cost of the planned refinancing would be significantly lower than that the current bond, and that it would lead to further savings on interest rates.

An international bond in the amount of €750 million, and a kuna-denominated bond in the amount of 6 billion kuna (€814 million) are due to mature in early July.

In early June, Croatia successfully refinanced a euro-denominated bond on the international market with a total value of €750 million with a maturity of ten years. The annual coupon interest rate amounts to 2.70 percent, with a yield of 2.89 percent. That issue will lead to a saving of €250 million over a period of ten years.

The maturity date of the kuna-denominated bond in the amount of 6 billion kuna is July 10. That bond was issued in two rounds, the first on July 10, 2013, in the amount of 2.75 billion kuna, and the second on December 10, 2014, in the amount of 3.25 billion kuna, both at an interest rate of 5.25 percent.

(€1 = 7.37 kuna)

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