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The state secures €99.8 million in funding through three-year bonds at more favorable borrowing terms

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On the first auction of three-year state bonds of the Republic of Serbia, denominated in euros, maturing on January 29, 2027, the state raised €99.8 million for the budget, while the auction volume was €250 million.

The total demand at the auction amounted to €137 million, and the state bonds were sold at a yield rate of four percent annually.

The bonds from the latest issuance will mature on January 29, 2027, with a coupon payment of 4.25 percent annually, scheduled every January 29 until the maturity date.

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It is worth noting that the main broker, Momentum Securities, and Nenad Gujaničić, in an interview with Biznis.rs, predicted such an outcome of the auction. Gujaničić emphasized that the euro-denominated state bonds issued earlier, maturing in May 2027, currently carry a yield of around 4.6-4.7 percent.

“It is certain that the new bonds in the domestic market will carry a lower yield. Considering the long history of the state’s cheaper borrowing in the domestic market compared to issuances and secondary trading abroad, it could be confidently predicted that the yield will be significantly lower than the mentioned rate,” stated our interviewee ahead of the auction on Thursday, January 25.

During the current quarter, the Public Debt Administration announced two more auctions of dinar-denominated bonds – on February 5 and March 5. However, since almost the entire EXPO bond issuance was sold on January 18, it is certain that the offered volume of securities will be far lower than the planned 15 billion dinars per auction.

The planned amount of state borrowing through bonds in the first quarter was, in total, 45 billion dinars and 250 million euros. However, the dinar portion has already been significantly exceeded, as investors purchased eight-year EXPO bonds a week ago amounting to 63.15 billion dinars at a yield rate of 6.15 percent.

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The total issuance of EXPO bonds is valued at 110 billion dinars, and through the realization of these securities, the state has borrowed 105.58 billion dinars so far.

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