Bulgaria, Lithuania Neck and Neck in Bond Results – FinMin
Bulgaria’s results in floating EUR 950 M worth of 5-year bonds final week at a yield of only four.25% comes close to the value greater-rated Lithuania achieved earlier this year, the finance minister has boasted.
The Lithuanian government raised EUR 400 M on international markets in April 2012 right after issuing a euro-denominated bond with four.21% yield.
“It is necessary to point out even so that Lithuania enjoys a higher credit rating than Bulgaria’s,” Finance Minister Simeon Djankov commented.
An Italian and Spanish current situation of comparable bonds reached a yield of about and more than five% even though the credit ratings of the two nations are a notch higher than Bulgaria’s.
Croatia – whose economy is considered much even more developed than Bulgaria’s sold – USD 1.five B of dollar-denominated, 5-year bonds to investors in April this year at a yield of 6.37% and cost of 99.472. The bond carried a coupon of 6.25%.
A Romanian problem in the middle of last month was undersubscribed, while Serbia’s 53-week nearby currency yield reached 14.25% on July 4.
Bulgaria tapped international markets to raise funds to repay the initial tranche of about EUR 835 M (USD 1.07 B) in 11-year eurobonds maturing on January 15, 2013.
The Balkan nation sold EUR 950 M worth of 5-year government bonds at an interest rate of below five%, significantly lower than the yield of 7.five%, which was accomplished through the country’s foray into international capital markets back in 2002.
Analysts have also commented that the timing for the eurobond was suitable as it seized sudden improvement in market sentiment following the newest European Union summit.
BNP Paribas, HSBC and Raiffeisen were appointed to advise the Bulgarian state as effectively as manage the sale of the bond.
Bulgaria is rated Baa2 by Moody’s Investor Services Inc., and BBB by Typical and Poor’s Corp.