Sept. 21 (Bloomberg) -- Croatia will borrow 260 million euros ($355 million) to refinance a maturing bond issued in 1991, officials said at a Cabinet meeting in Zagreb today. Croatia will repay the loan by 2016 with a fixed interest rate of 5.5 percent.
The original bond, issued in Yugoslav dinars before the introduction of the kuna in Croatia, is now worth 2.4 billion kuna ($437 million) in today’s Croatian currency.
The loan is facilitated in equal parts by Hypo Alpe-Adria-Bank d.d, a local unit of Austria’s Hypo Alpe-Adria-Bank International AG., and by Erste & Steiermarkische Bank d.d., a unit of Erste Group Bank AG.
The Croatian government will also supply 482 million kuna from the 2011 state budget to pay off the maturing bond.
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