December 6 (SeeNews) - The European Bank for Reconstruction and Development (EBRD) said on Tuesday its first bond placement in Serbian dinars was fully subscribed.
The 2.5 billion dinars ($21.8 million/20.3 million euro) issue will increase the bank’s ability to lend to the Serbian economy in the country's currency and will contribute to "dinarisation" of local finance, the EBRD said in a statement.
The three-year, floating rate bond will be traded on the Belgrade Stock Exchange. The issue was underwritten by Raiffeisen Banka Beograd and Citigroup acted as a marketing agent, the EBRD added.
The EBRD said in a separate report on the outcome of the public offering of the debt securities that the offer was successful and the 100-percent threshold of success was met.
“This milestone for the market in Serbia is a continuation of the EBRD’s efforts to reduce dependence on foreign currency borrowing in the countries where we work and to encourage people to raise finance in local currency,” the EBRD’s Head of Funding, Isabelle Laurent, said in the statement.
The EBRD’s Director for Serbia, Dan Berg commented that the environment for borrowing in dinars had improved significantly due to Serbian central bank and government policies that have successfully lowered the level of domestic interest rates, making local borrowing a more attractive proposition.
The floating rate was set equal to three-month BELIBOR plus 40 basis points. The interest on the bonds will be paid on a quarterly basis as of March 2017, the bank added.
BELIBOR, the rate at which dinar interbank term deposits within the Serbian market are offered, is calculated as an average of daily quotes provided by ten panel banks and is updated on a daily basis.
Three-month BELIBOR stood at 3.45% on Tuesday, according to data from Serbia's central bank.
(1 euro=122.850 Serbian dinars)