- Country also sets $650 million buyback of debt due 2020, 2021
- Bond price guidance looks `pretty attractive': Danske Capital
Latvia pushed ahead with a Eurobond sale on Tuesday and said it will buy back some of its external debt one day after the Baltic country’s prime minister resigned.
The government is selling 550 million euros ($598 million) in five-year securities at 28 basis points over mid swaps, according to a person with knowledge of the offering who isn’t authorized to speak publicly and asked not to be identified. The state treasury is planning to repurchase $650 million of dollar debt, according to a filing Tuesday with the Luxembourg stock exchange.
“It’s not overly attractive but fair,” said Bent Lystbaek, a money manager at Danske Capital in Lyngby, Denmark, who reduced his initial order for the new bond but stayed in the deal. The resignation on Monday of Laimdota Straujuma, Latvia’s first female prime minister, won’t have a material impact on demand for the securities, he said.
Latvia last tapped global markets in September, raising 500 million euros of 10-year bonds at a yield of 1.449 percent to refinance maturing debt and finance a budget deficit. The yield on those securities fell two basis points today to 1.12 percent at 4:13 p.m. in Riga.
Barclays Plc, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are organizing Tuesday’s bond sale. The Baltic country of almost 2 million people is rated A- by Standard & Poor’s, its seventh-highest credit rating.
Latvian President Raimonds Vejonis called all political parties for talks on Thursday and Friday on forming a new government after the prime minister bowed to pressure from within her party as it tries to reverse a collapse in support a year after winning office.
Latvia joins Macedonia, Romania, Lithuania, Poland and Albania which raised almost 6 billion euros in Eurobond sales this quarter, pushing the total annual number to 18.7 billion euros in eastern Europe, the highest since 2010, data compiled by Bloomberg shows.