The rate is the same which Fitch gave the country as a whole and its eurobonds at a previous such sale in 1999.
"The BBB rating is quite nice," said Roberts Grava, a member of the executive board at the Bank of Latvia who recently returned with the finance minister from a European road show promoting the revenue generating bonds. "It is an investment-grade rating."
The Latvian Finance Ministry announced the release of the new seven-year eurobonds, which are offered to investors in a number of countries and remain outside the jurisdiction of any single country, Nov. 9.
Worth about 200 million euros ($181.81 million) with a fixed annual percentage rate of 5.375, the bonds should be issued before the end of the year.
German investors will take 21 percent of the Latvian eurobonds, while 19 percent will go to investors in Britain, 11 percent to Austria, 10 percent to France, 9 percent to Switzerland, 8 percent to the Netherlands and 7 percent to Italy.
Investors from the United States and Latvia will both take 4 percent, and another 3 percent will go to both Scandinavians and Middle Eastern buyers. Estonian investors will buy 1 percent of the bonds.
Latvijas Unibanka and Parex banks are the two domestic investors.
"The wide geographic representation of investors should be viewed as a positive factor both financially and in the national security context ... as it confirms trust in Latvia's future growth," Latvia's Finance Minister Gundars Berzins told the Baltic News Service.
Latvia issued its first five-year eurobonds, worth a total of 150 million euros in May 1999 and with an interest rate of 6.25 percent annually. More five-year eurobonds were later issued for 75 million euros at the same percentage rate in September 1999.
Because the new eurobonds have a lower interest rate and longer maturation period than those sold at the last issue, investors in the seven-year bonds will be paid back at the same time as those who have five-year bonds.
"They talked about seven years or 10 years, but investors were more interested in the seven year eurobonds," said Grava.
The issue, which is worth 50 million euros more than originally planned, is already having an effect on the yields from treasury bills, said Elmars Priksans, head of sales and trading at Hansabanka.
Because the Finance Ministry is borrowing abroad instead of domestically, he said, the number and yield of treasury bills will drop.
For local businesses looking to borrow, however, that might be good news.
"We will definitely see lending rates going down," Priksans said.