Lithuania borrows at the most favourable terms in the international markets

Date

2019 06 12

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Today, Lithuania borrowed EUR 1.5 bn in the international capital markets by issuing two Eurobond issues of different maturities, the 10-year Eurobond of EUR 650mn face value and 30-year Eurobond of EUR 850 mn face value. The decision to borrow for a long period was made due to the favourable situation in the international financial markets, the objective to manage risk properly and to fix low interest rates for a long period.

‘The strategy chosen has allowed concentrating the investors’ demand on long-term investment. By taking advantage of the existing low-interest environment, we have ensured the appropriate refinancing of the issue to be redeemed next February and the reduction of debt service costs. In turn, the long duration of borrowing will allow a more even distribution of debt repayment flows and longer use of attractive financing conditions’, Vilius Šapoka, the Minister of Finance, said.

The 10-year Eurobond of EUR 650 mn is the cheapest one in Lithuania's borrowing history; only 0.5 per cent annual interest will be paid for it. The Bonds have been issued at a yield of 0.603 per cent and issue price equal to 99.003 per cent of their face value. The settlement for the Bonds will take place on 19 June 2019. The Eurobonds will mature on 19 June 2029.

Lithuania has issued its 30-year issue for a second time (face value of EUR 850 mn). Lithuania will pay 1.625 per cent annual interest for it. The Bonds have been issued at a yield of 1.732 per cent and issue price equal to 97.513 per cent of their face value. The settlement for the Bonds will take place on 19 June 2019. The Eurobonds will mature on 19 June 2049.

The borrowed funds will provide a reserve for redemption of EUR 1.3 bn Eurobond issue (with 7.375 per cent annual interest) on 11 February 2020.

The transaction was lead-managed by BNP Paribas and J.P. Morgan.

 

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