Post by radovic on Nov 27, 2007 10:57:43 GMT -5
Serbia to repay part of USD 1.07bn London Club debt
EMonline
Serbia would contact big investment funds, now holding the debt, and offer them an early, partial debt repayment.
Serbia it would try to repay part of its $1.07bn debt to the London Club of bank creditors in 2008 if it can work out a refinancing bond that would cost less than 6.75% a year.
"The plan is very realistic," said state secretary in the Finance Ministry Janko Guzijan. "If we manage to repay early some 40% of the debt we will save a cumulative EUR 70mn, 'Serbia & Montenegro Today' reports.
Janko Guzijan said that Serbia was considering refinancing through a "euro-denominated, coupon bond to be issued at home and available to both foreign and domestic investors". "Right now we are in talks with Citigroup, Deutsche Bank, UBS, Merrill Lynch and JP Morgan on how to organise the refinancing," he added. Guzijan said that Serbia would contact big investment funds, now holding the debt, and offer them an early, partial debt repayment. He said Serbia expected to repay early between $300mn and $500mn.
But the repayment would be possible only if it comes cheaper than 6.75% a year, the coupon Serbia would need to start paying as of 2009 upon the expiry of a five-year grace period with a 3.75% coupon.
"If there was no refinancing, Serbia would have to step up repayments to the London Club from a current $40mn to $140mn a year, he said. Serbia's total foreign debt stood at $23.1bn at the end of September, including an $8.7bn in public external debt – equivalent to some 30% of GDP.
Guzijan said refinancing could also help Serbia improve its credit rating. Last summer Standard & Poor's revised Serbia's outlook to stable from positive due to fiscal policy loosening, but affirmed its 'BB-' long-term and 'B' short-term foreign and local currency sovereign credit ratings.
Fitch has kept its rating at BB- with stable outlook but noted that political risk "remains a material constraint on Serbia's sovereign rating." (Serbia & Montenegro Today)
EMonline
Serbia would contact big investment funds, now holding the debt, and offer them an early, partial debt repayment.
Serbia it would try to repay part of its $1.07bn debt to the London Club of bank creditors in 2008 if it can work out a refinancing bond that would cost less than 6.75% a year.
"The plan is very realistic," said state secretary in the Finance Ministry Janko Guzijan. "If we manage to repay early some 40% of the debt we will save a cumulative EUR 70mn, 'Serbia & Montenegro Today' reports.
Janko Guzijan said that Serbia was considering refinancing through a "euro-denominated, coupon bond to be issued at home and available to both foreign and domestic investors". "Right now we are in talks with Citigroup, Deutsche Bank, UBS, Merrill Lynch and JP Morgan on how to organise the refinancing," he added. Guzijan said that Serbia would contact big investment funds, now holding the debt, and offer them an early, partial debt repayment. He said Serbia expected to repay early between $300mn and $500mn.
But the repayment would be possible only if it comes cheaper than 6.75% a year, the coupon Serbia would need to start paying as of 2009 upon the expiry of a five-year grace period with a 3.75% coupon.
"If there was no refinancing, Serbia would have to step up repayments to the London Club from a current $40mn to $140mn a year, he said. Serbia's total foreign debt stood at $23.1bn at the end of September, including an $8.7bn in public external debt – equivalent to some 30% of GDP.
Guzijan said refinancing could also help Serbia improve its credit rating. Last summer Standard & Poor's revised Serbia's outlook to stable from positive due to fiscal policy loosening, but affirmed its 'BB-' long-term and 'B' short-term foreign and local currency sovereign credit ratings.
Fitch has kept its rating at BB- with stable outlook but noted that political risk "remains a material constraint on Serbia's sovereign rating." (Serbia & Montenegro Today)