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EFSE invests in Serbia's first MREL-bond

Jun 20, 2024, 10:11:54 AMArticle by Iskra Pavlova
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June 20 (SeeNews) - The European Fund for Southeast Europe (EFSE) invested in a 6 billion dinar ($55.1 million/51.3 million euro) issue of debt securities sold earlier in June by the Serbian unit of Austria's Raiffeisen Bank International (RBI) - Raiffeisen Banka Beograd, the EFSE's advisors on the deal said.

EFSE invests in Serbia's first MREL-bond
Source: Raiffeisen Bank International

EFSE participated alongside reputable international lenders in the bond, the country's first dinar-denominated, Minimum Requirement for Own Funds and Eligible Liabilities (MREL) issue, thus supporting the dinarisation strategy of the Serbian central bank, advisory firm Karanovic & Partners said in a statement on its website.

The statement did not reveal the size of EFSE's investment in the issue.

On June 6, Raiffeisen Banka sold 300 bonds at 20 million dinars each, equal to their par value. The bonds have an interest rate of 3-month BELIBOR plus 2.50% and will mature on June 6, 2028. BELIBOR is the benchmark rate offered on dinar deposits by Serbian banks in the interbank market. The securities have been listed for trading on the Belgrade bourse.

Last week, the European Bank for Reconstruction and Development (EBRD) said it invested 2.3 billion dinars (equivalent to 19.6 million euro) in Raiffeisen Banka's MREL bond issue, noting that the financing will support lending to micro, small and medium-sized enterprises (MSMEs) in Serbia, and green projects under the EBRD’s Green Economy Transition approach.

Belgrade-based Raiffeisen Banka was established in 2001 as one of the first greenfield foreign banks in Serbia. Out of 20 active banks in Serbia at the end of March, Raiffeisen Banka was the third largest in terms of assets, behind the local unit of Italy's Intesa Sanpaolo - Banca Intesa Beograd (BIB), and OTP Banka Srbija, according to central bank data.

EFSE was launched in 2005 by German development bank KfW with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Commission. EFSE draws its capital from donor agencies, international financial institutions, and private institutional investors.

(1 euro = 117.066 dinars)

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