Aug. 28 (Bloomberg) -- Finland’s government raised 4 billion euros ($5.3 billion) in a sale of five-year euro-denominated bonds to replenish its coffers depleted by falling tax revenue amid its second recession in four years.
The bond, maturing on Sept. 15, 2018, pays a coupon of 1.125 percent, the Helsinki-based State Treasury said in an e-mailed statement. The bonds were priced at 99.733 with a yield of 1.180 percent. It received orders from 101 investors worth 6.9 billion euros.
“The issue generated wide interest among domestic investors,” Deputy Funding Director Anu Sammallahti said after the bond was priced. “About 20 percent of the bond was sold to investors in Finland. The large number of pension funds was a pleasant surprise in this maturity.”
Finland, which is yet to escape a recession that started last year, is raising funds to pay for its 2013 budget deficit after the country lowered a forecast for tax revenue. The economy will shrink 0.4 percent in 2013 and expand 1.4 percent in 2014, according to a Bloomberg survey of 11 economists. The northernmost euro member is the only country within the monetary union to have an AAA rating with a stable outlook from all three major credit rating companies.
Finland increased its net borrowing estimate for 2013 on Aug. 23 by 15 percent to about 9 billion euros as the recession erodes tax revenue. The higher funding target won’t pose a problem to the treasury, which plans to distribute it among its various instruments, Sammallahti said on Aug. 23.
To contact the reporter on this story: Kati Pohjanpalo in Helsinki at firstname.lastname@example.org
To contact the editor responsible for this story: Tasneem Brogger at email@example.com