The issue of a 10.5 billion kuna (€1.42 billion) bond on the domestic financial market has been completed, Finance Minister, Zdravko Maric, said on Wednesday.

“So, as envisaged in the 2018 budget that the Croatian parliament had adopted, we planned a domestic bond issue worth 10.5 billion kuna,” Maric said in Varazdin after attending a meeting with local government officials and Prime Minister Andrej Plenkovic.

Maric noted that the major part of the bond issue would be used to refinance a domestic bond that matures on July 10, and amounts to 6 billion kuna (€813 million).

“There will be two instalments of this issue. The longer one matures in 11 years and amounts to 5 billion kuna (€677.5 million) with a 2.58 percent yield, and the shorter one is a 5-year issue worth 5.5 billion kuna (€745 million) with a yield of 1.22 percent. Taken as a whole, the entire issue has a yield under 1.9 percent, which, compared to the bond that will be rescheduled, means a saving of 200 million kuna (€27.1 million) per year,” Maric explained to interested reporters.

He added that this is yet another indicator of the good state of affairs in public finances, and also in the local finance industry, because the interest shown for buying the bond was nearly 16 billion kuna (€2.1 billion), by all sorts of investors including pension funds, investment funds, insurance companies, and banks.

Later on Wednesday, the finance ministry offered a bond on the domestic market with a maturity of 2023 and 2029, ahead of the 6 billion kuna due to mature on July 10.

In addition to a €750 million euro-denominated bond last month, that will reschedule an equivalent bond due on July 9, the latest issue of the domestic currency-denominated bond will help the ministry cover all its financing needs this year.

In early June, Croatia successfully refinanced a euro-denominated bond on the international market, with a total value of €750 million and a maturity of 10 years, due to mature in 2028. Its yield will be 2.89 percent, meaning the new bond will help save the state budget some €250 million over a period of ten years.

(€1 = 7.38 kuna)

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