Bosnia’s Serb Republic To Buy Gradiska Municipal Bonds

“With this decision, IRBRS wants to stimulate other investors, institutional and individual, to take part in the purchase of the issue,” the bank said in a statement posted on its website.

The town of Gradiska on Wednesday launched the subscription for its six-year municipal bond issue worth 2.7 million marka on the Banja Luka Stock Exchange (BLSE). The town will use the raised funds to finance the construction of a sports hall.

The bonds carry a fixed annual coupon of 6.0%. The offer will be valid until the issue is fully subscribed or until January 13, 2009, whichever comes first.

Gradiska is located near the border with Croatia, in the northern part of Bosnia's Serb Republic, which together with the Muslim-Croat Federation forms the war-divided country. It is the third town to issue municipal bonds in Bosnia, following issues earlier this year by Laktasi and the Serb Republic’s administrative centre Banja Luka.

IRBRS also said in the same statement it will use its pre-emptive rights in a capital hike planned by resort operator Jahorina Olimpijski Centar (OC) in which it controls 65% via the Serb Republic’s Shares Fund and 5.0% via its Restitution Fund.

Jahorina OC said in September it would seek to raise 10 million marka in a new share issue on the Banja Luka Stock Exchange (BLSE) this month but did not specify the purpose of the capital hike. It will issue 10 million new shares at a price of 1.00 marka, equal to their nominal value. Its stock was last traded on April 1 at nominal value, down 18.03% from the previous trading on January 23, BLSE data showed.

Jahorina OC (www.oc-jahorina.com) manages the Jahorina mountain resort near the Bosnian capital Sarajevo. Jahorina was one of the host resorts of the 1984 Sarajevo Winter Olympics.

(1 euro = 1.95583 Bosnian marka)