Serbia places $750 mln Eurobonds, hopes for $300 mln Russian loan by end 2012
MOSCOW. Nov 15 (Interfax) - Serbia has placed $750 million in five-year Eurobonds at yield of 5.45% pa, Andrey Solovyev, global head of debt capital markets at VTB Capital, one of the placement organizers, told Interfax.
The coupon yield is 5.25%.
"Demand was around $4 billion. More than 160 investors made bids, enabling yield to be lowered from 5.625% to 5.45% and the issue volume raised to $750 million.
This is the first placement of sovereign Eurobonds in Eastern Europe to have been co-organized by a Russian investment bank. The other organizers were Deutsche Bank and HSBC.
The last time Serbia entered the borrowing market was this past September, when the country placed $1 billion in sovereign Eurobonds maturing in 2021, doubling issue volume. In the fall of last year, the country placed $1 billion in ten-year Eurobonds with a coupon rate of 7.25%. The securities were issued to support the country's fiscal balance.
To strengthen Serbia's budget, Russia has extended the country a $200 million credit.
Serbia plans to raise another credit from Russia. The two countries' finance ministers have proposed to discuss this in the near future, Russian Finance Minister Anton Siluanov has said.
At the beginning of September, Serbian media reported Serbia's Minister of Natural Resources Milan Bacevic as saying that Russia and Serbia had struck a deal on a credit of $300 million. The Russian Finance Ministry has said the two countries had yet to begin negotiating the credit.
Deputy Finance Minister Sergei Storchak said two months ago that before the end of fall there would be signed documents concerning the extension to Serbia of a tied credit of $700 million. He said at the time that negotiations over this credit, with the involvement of Russian Railways (RZD) , had been completed.
Bacevic said at a meeting of the Russian-Serbian inter-governmental commission on November 15 that Serbia was hoping to receive the $300 million loan by the end of this year. "We'd like to receive the financial aid from Russia more quickly, we expect to receive the $300 million loan by the end of the year," he said.
Serbia needs the money to plug the deficit that arose under the previous government, Bacevic said. "In the situation in which we found ourselves we were forced to turn to our partners. It'd be hard for us to pull out of this situation without this support," he said.
Bacevic also said Serbia hoped to receive the $700 million loan to cover other fiscal obligations next year.
