Strong reception for Latvian bonds

  • 2011-06-15
  • From wire reports

RIGA -  Latvia successfully returned to the international capital markets and on June 9 issued 10-year eurobonds worth 500 million dollars with an annual interest rate of 5.25 percent, which is an improvement on its March 2008 issue, when Latvia last sold Eurobonds at 5.5 percent per year, said Finance Ministry spokeswoman Baiba Melnace, reports news agency LETA. Finance Minister Andris Vilks (Unity) believes that the successful bond issue indicates that the international financial markets, investors in particular, highly appreciate Latvia’s achievements in economic and financial stabilization.

Vilks believes that the bond issue will create the basis for refinancing of the international bailout loans on public financial and capital markets in the near future. Therefore, in order to maintain the international financial markets’ trust and ensure beneficial loan terms, Latvia must continue to successfully implement the economic stabilization program, emphasized the minister.
Melnace said that from June 2 to June 6, Vilks and representatives of the Finance Ministry, the State Treasury and the Bank of Latvia met with investors in London, New York, Los Angeles, San Francisco and Boston to discuss the current macroeconomic situation in the country, the implemented structural reforms and measures to stabilize the fiscal situation.
She noted that the investors were highly interested in purchasing Latvia’s bonds, and the demand for the bonds significantly exceeded the amount offered.

The issue was part of a medium-term borrowing strategy and agreement between the Latvian government, Bank of Latvia, Financial and Capital Market Commission and the international loan program partners, according to which Latvia will return to the international financial markets and no longer require additional funding from the program.
Lead managers on Latvia’s bond sale were Citigroup and Credit Suisse.