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Albania Issues Euro Bond for 300m
The government of Albania has issued a 300m euro bond, a bond issue it postponed in April because of the unfolding debt debacle in Greece. The first Euro denominated bond ever issued by Albania is being managed by Deutsche Bank AG along with JP Morgan Chase & Co, and has a 5 year maturity at 7.5% interest.
From an impoverished former Soviet satellite state entering the noughties, the Albanian government has completely turned the country around; culminating in the achievement of middle income status in 2006. This allowed it to begin taking loans from world banks instead of being reliant on grants from organisations like the IMF.
The issuance of euro denominated bonds is another step forward in its economic development, but also in its integration with the EU.
“This is an historic moment not only for our government, but for all Albanians. Issuing of the Eurobond in this coupon and interest rate confirms the credibility to the Albanian economy," said the Albanian minister of finance, Ridvan Bode.
"The markets will enjoy the Eurobond of Albania. We think the timing is perfect," said Albanian Central Bank Governor Ardian Fullani for Reuters.
"Now is probably the right moment to come with a new issue," Stuart Culverhouse, chief economist at Exotix Ltd., an investment bank, said for Bloomberg. "The 7.5% yield is "reasonably attractive", he said.
According to the finance ministry, a larger 400m bond was authorised but analysis of the debt portfolio and interest rates on Eurobonds caused them to decide not to go for the full amount. The money raised is to pay off a 250 million syndicated loan taken last year with an interest rate of 13%.