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BELGRADE (Serbia), February 20 (SeeNews) - The European Bank for Reconstruction and Development said on Wednesday it has invested 542 million dinars ($5.2 million/4.6 million euro) in a local currency bond issued by Erste Bank Serbia, the EBRD said on Wednesday.
"EBRD invested 542 million dinars in the 3.5 billion dinar offer and the oversubscribed sum was returned to all investors pro rata," an EBRD official told SeeNews in an e-mailed statement.
This is the EBRD’s first investment in a local currency bond in Serbia, the bank said.
Erste Bank Serbia said on Monday it raised 3.5 billion dinars ($33.6 million/29.7 million euro) from the sale of two-year bonds, fully meeting its target. The issue attracted bids worth 3.87 billion dinars, exceeding the target offer by about 10%, and the funds over the planned amount were returned to the investors on a pro-rata basis.
The investment will contribute to the development of Serbia’s corporate bond market which is still at an early stage of development and facilitate the access of local small and medium-sized enterprises to longer-term local currency financing, the EBRD said.
"We are pleased to support Erste Bank’s local currency bond issue. This investment confirms our strong committment to the development of the local capital market and the use of the local currency dinar in the domestic financial system," Zsuzsanna Hargitai, EBRD director for the Western Balkans, said.
The bonds of 10,000 dinars in par value each bear an interest rate equal to three-month Belgrade Interbank Offered Rate (BELIBOR) plus 100 basis points. The three-month BELIBOR currently stands at 3.01%. Interest payments are due quarterly, according to the prospectus of the issue. The securities will mature on February 15, 2021.
(1 euro = 117.995 dinars)