ECB Stimulus Pledge Pulls Macedonia Back to Euro-Bond Market

  • Ex-Yugoslav republic offers 270 million euros of notes
  • Government started marketing bonds at about 5.375 percent

Macedonia is returning to the international capital markets after more than a year, becoming the latest developing nation to take advantage of declining borrowing costs amid promises of more stimulus from the European Central Bank.

The former Yugoslav republic is selling 270 million euros ($280 million) of five-year notes at 5.125 percent, down from about 5.375 percent earlier on Tuesday, according to a person familiar with the sale who asked not to be identified because the information is private. The yield on the country’s bonds due in 2021 rose 11 basis points to 4.97 percent.

“It is still a good spread” above the existing bond, said Lutz Roehmeyer, who oversees about 1 billion euros in emerging-market debt as director of fund management at Landesbank Berlin Investment GmbH, and plans to buy the bonds.

Citigroup Inc., Deutsche Bank AG and Erste Group Bank AG are organizing the sale.

Macedonia joins other ex-Yugoslav countries which have raised 4.8 billion euros via international bonds this year. With few Eurobond sales coming out of Russia and Turkey and near zero rates in western Europe, investors are eager to place money with higher yielding borrowers. ECB chief Mario Draghi’s promise of more stimulus and expectations the U.S. will raise interest rates next month have made it the busiest fourth quarter in three years for Euro-bond sales in eastern Europe.

The sale comes as Macedonia faces 150 million euros of bonds maturing next month.

Slovenia raised more than 2.8 billion euros this year including in 30-year bonds, its longest maturity. Croatia sold 1.5 billion euros of 10-year bonds and Montenegro raised 500 million euros of five-year notes.

Serbia, which last sold bonds in euros in 2002 and in dollars two years ago, has no need to borrow in foreign markets this year, Branko Drcelic, head of the country’s Debt Management Agency said Nov. 16 by e-mail.

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