Croatia has issued a seven-year HRK 9 billion bond on the domestic market at an interest rate of 0.50% and a yield to maturity of 0.533%, the Ministry of Finance announced in a statement on Thursday.

The new bond matures in 2028 and the demand, which was more than twice as high as the offer, made it possible for the issuer to complete this transaction with no new-issue premium, the statement said.

The proceeds will be mostly used to refinance the existing bond issue of HRK 6 billion falling due on 8 July 2021, and implied interest savings exceed HRK 135 million. Investors subscribed for more than HRK 19 billion.

The bond issue was arranged by Erste & Steiermärkische Bank, OTP Bank, Privredna Banka Zagreb, Raiffeisenbank Austria and Zagrebačka Banka as lead arrangers and Hrvatska Poštanska Banka as a co-arranger.

This is the second bond issue this year, but first on the domestic market.

Towards the end of February, Croatia issued two tranches of bonds in the total nominal amount of €2 billion on the foreign capital market – a 12-year €1 billion bond at an annual coupon interest rate of 1.125% and a yield of 1.257%, and a 20-year €1 billion bond at an annual coupon interest rate of 1.75% and a yield of 1.788%.

(€1 = HRK 7.49)