2nd February 2023, Skopje – On Thursday, Republic of North Macedonia issued the ninth Eurobond, amounting to EUR 600 million, to be exclusively used for financing the liabilities on the basis of prior debts, falling due for repayment this year. On the basis of principal and interest, for the purpose of servicing prior debts towards foreign creditors, this year, EUR 594 million should be repaid as principal, as well as EUR 138 million as interests. Seven-year Eurobond issued in 2016 accounted for the most thereof, for which EUR 450 million, with an interest of additional EUR 25 million, should be repaid this year alone.
By reason of the due liabilities, the ninth Eurobond has been issued despite the tightened conditions on the international capital market, as evidenced by the multiple increase of the major central banks’ interest rates.
Coupon interest rate of 6.25% per year, being attained today, is lower than the market interest rates on the already issued Eurobonds, being currently traded on the international stock exchanges. It is much lower than the interest rates, predominating over the last months during the energy crisis, which is still ongoing, reaching even more than 8%.
Financing of this year’s budget deficit was provided under even more favorable conditions through the EC Macro-Financial Assistance, the IMF Precautionary and Liquidity Line and other international institutions, such as the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank.
The borrowing is aimed at repaying only the amount pertaining to the prior debts rather than the overall approved amount of up to EUR 800 million, a given the costly interest rates on the financial markets. Maturity deadline of the new Eurobond is only four years, with the aim of setting a shorter repayment period (instead of the usual seven years), all to the end of reducing the annual budget costs upon interest payments.
Demand for the ninth Eurobond was 2.5 times higher than the offered amount, thus speaking in favor of the investors’ confidence in our economy and economic policies. Interest rate on the issued Eurobond is at the same level as the one on the Eurobonds with a similar maturity from the EU Member States (such as Hungary and Romania) and the EU candidates countries (Serbia), being issued thereby at the beginning of the year. Although these countries have a higher credit rating, their attained coupon interest rate is as approximately the same as the one on the ninth Eurobond.
This speaks in favor of the sound fundamentals and macroeconomic policies implemented by the Government, as affirmed by the approved IMF Precautionary and Liquidity Line, the EC Macro-Financial Assistance, the opened screening process for launching negotiations foe EU membership, as well as the as well as stronger (than planned) fiscal consolidation and lower public debt during 2022 and within the five-year projections. Our commitment, as a Government, to attentive management of public finances, has been translated into a modern legislation, by adopting the new reform Organic Budget Law, providing for setting fiscal rules, i.e. debt and budget deficit limits, and establishing the Fiscal Council as an independent body, which will oversee the execution thereof.
Оваа вест е достапна и на:
