The Securities Commission has greenlit Raiffeisen Bank‘s release of a single prospectus for the public offering of 300 units of long-term dinar bonds from the first issue, each carrying a nominal value of 20 million dinars.
With a total value of six billion dinars, or just over 51 million euros, the bonds will be traded on the regulated market of the Belgrade Stock Exchange. Nenad Gujaničić, chief broker at Momentum Securities, elaborated to Biznis.rs that this move expands the pool of potential bond buyers on the primary market. Currently, besides state bonds, the Belgrade Stock Exchange only lists Energoprojekt’s corporate bonds, which see little demand on the secondary market.
Gujaničić noted that while listing on the secondary market doesn’t guarantee high trading volume, increased primary market activity is crucial for a liquid secondary market. Unfortunately, both corporate and government bonds often see limited participation on the primary market, resulting in interbank-dominated secondary trading. He expects Raiffeisen Bank’s bond to face a similar fate.
Raiffeisen Bank’s bond isn’t the first of its kind on the domestic stock exchange. That honor belongs to Erste Bank, which issued the first corporate dinar bond in 2012. Societe Generale Bank (now under OTP Bank) also issued a dinar long-term security, initially in a closed offer and later listed on the stock market.
In 2019, Erste issued a second batch of dinar bonds with a maximum value of 3.5 billion dinars, featuring a two-year maturity and a variable interest rate tied to three-month BELIBOR plus one percent.
Additionally, the European Bank for Reconstruction and Development (EBRD) issued dinar-denominated bonds on the domestic market in 2016. The proceeds of 2.5 billion dinars were earmarked for approving dinar loans, reducing borrowers’ exposure to exchange rate fluctuations. These bonds had a three-year maturity and a variable interest rate based on three-month BELIBOR plus a 0.4 percentage point margin, with Raiffeisen Bank Belgrade serving as the sponsor and Citigroup as the issue agent.
