16/09/2021
The Republic of Serbia priced a dual tranche today in the international financial market, issuing two euro-denominated eurobonds. For the first time in history, Serbia issued a green eurobond worth EUR 1.0 bn, with the maturity of seven years (7Y), demonstrating that it is an environmentally responsible country. The 7Y bond was issued at 1.00%, this being the lowest coupon rate ever, and a yield rate of 1.26%, while investor demand in the auction exceeded EUR 3 bn. At the same time, a conventional 15Y eurobond was issued in the amount of EUR 750 mn, at a coupon rate of 2.05% and a yield rate of 2.3%. The demand for this longest maturity Serbian eurobond exceeded EUR 2.5 bn.
Today’s green bond issuance places Serbia among the ranks of few European countries and the only non-EU country to have issued a green instrument. The funds raised will be used exclusively to finance or refinance new and existing expenditures aimed at even more sustainable growth of our economy, through investments in the areas of renewable energy, energy efficiency, transport, sustainable water management and pollution prevention and control.
“Another successful appearance of our country in the international market and the remarkable interest of international investors in Serbian bonds, which shot past EUR 6 bn during the auction, only reaffirms the confidence investors have in the long-run sustainability of Serbia’s strong economic performance and macroeconomic stability. I am particularly happy about the fact that the demand for our first green instrument was so robust, resulting in the lowest rate of financing ever recorded by Serbia (1.00%) and indicating investors’ confidence in our sustainable development strategy“, underlines Governor Jorgovanka Tabaković.
In the past three days a delegation of the NBS and the Ministry of Finance had a number of successful talks with international investors and financial institutions, thanks to which today’s auction attracted more than 200 eminent investors from all over the world.
“Every appearance in the international market is a kind of test of economic performances and investor confidence in the issuer’s economic policies. The fact that in an environment of persistent uncertainty in global markets, the Republic of Serbia has again achieved exceptionally favourable terms of financing only confirms that renowned investors assess our post-crisis economic performance positively and that they already perceive Serbia as a country with investment-grade rating, i.e. offering high security of investment. The extent to which today’s dual tranche was successful is best illustrated by the fact that during the day Serbia managed to lower interest rates by a fifth compared to the initial conditions, i.e. by 20% (0.35 pp) in case of the green 7Y bond and by 13% (0.30 pp) in case of the conventional 15Y bond”, noted the Governor.
The green bond fully complies with the Green Bond Principles of the International Capital Market Association, which represent the world standard in this field. The funds raised will be used in accordance with the Framework Document for Green Bond Issuance, while the proceeds of the conventional eurobond will be used in part to refinance existing debts, but also to support further growth of the Serbian economy. As so far, the sustainability of Serbia’s public debt will not be threatened at any point.
Governor's Office
