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A Successful Issue of Eurobonds Caused a Brief Jump of Public Debt

Date

2003 04 29

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Vilnius, 29 April, 2003. The public debt, which increased by more than LTL 1 billion in March due to an exceptionally successful issue of eurobonds in foreign markets, has decreased by an almost equivalent amount in April, according to preliminary data of the Ministry of Finance.

Over March, the total public debt (including government guarantees on loans) increased by LTL 1,311.6 million. By the end of the month, it amounted to LTL 14,352.6 million, i.e. 26.7% of the forecasted GDP.

“In the end of February, the government took advantage of a favourable situation in foreign financial markets and issued a EUR 400 million eurobond issue at the lowest interest rate ever, i.e. 4.5%. The huge demand and the lowest interest rate show that the Ministry of Finance chose the right borrowing strategy and tactics”, the reasons of the increase of the debt in March are explained by Mrs. Daiva Kamarauskienė, Director of the Public Debt Management Department of the Ministry of Finance.

By preliminary data, in April the public debt has narrowed by more than LTL 1 billion because the funds generated from the issue of eurobonds were used to redeem a LTL 250 million eurobond issue released in 1999. Besides, special purpose GS worth LTL 165 million were redeemed in the domestic market. The final data on the debt developments in April will be announced on 29 May.

In March, the direct public debt increased by LTL 1,299.7 million to LTL 12,658.7 million and accounted for 88.2% of the total debt.

The contingent government liabilities (government guarantees on loans) increased by LTL 11.9 million and comprised LTL 1,693.9 million, or 11.8% of the total debt.

The total long-term debt (including guarantees extended by the government) amounted to LTL 13,770.4 million, or 95.9% of the total debt; the short-term debt amounted to LTL 582.2 million, or 4.1% of the total debt.

As of 31 March 2003, the total foreign debt amounted to LTL 10,185.6 million, or 71.0% of the total public debt. Lithuania was indebted in foreign currency: to international development organisations (the World Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Nordic Investment Bank and other international organisations) LTL 1735.9 million, to foreign government institutions – LTL 497.4 million, to the International Monetary Fund – LTL 210.8 million, and to other creditors (commercial banks and financial institutions) – LTL 7,741.5 million.

By the end of March, the total domestic debt amounted to LTL 4,167.0 million, or 29.0% of the total public debt. The government was indebted in litas: to commercial banks – LTL 2,247.0 million, financial institutions and individuals – LTL 1,795.4 million, other public sectors – LTL 124.6 million.