Serbs to Repay $430 Million of Debt Early, Finance Minister Says

Serbia wants to begin the early repayment of $430 million of debt at the end of April and complete the transaction by the autumn as the government tries to stem the further expansion of public debt.

The government “is expected to endorse the proposed repayment plan” for debt holding a 6.75 percent coupon on March 14, Finance Minister Mladjan Dinkic told a business forum in the Serbian mountain resort of Kopaonik today.

Prime Minister Ivica Dacic’s eight-month-old Cabinet wants to keep public debt below 65 percent of gross domestic product this year and lower it next year. Public debt expanded by a “catastrophic” 3 billion euros and it will grow by 1.5 billion euros this year, Dinkic said.

Serbia’s debt to the London Club of creditors, maturing in 2024, is the only liability with a 6.75 percent coupon, according to data compiled by Bloomberg. The outstanding debt to the London Club stood at 652.1 million euros ($848.2 million) at the end of 2012, central bank figures show.

The London Club wrote down 62 percent of Serbia’s $2.7 billion debt in 2004, agreeing to a 20-year repayment, with interest at 3.75 percent for the first five years and 6.75 percent for the remaining 15 years.

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