February 9 (SeeNews) - North Macedonia issued a four-year Eurobond worth 600 million euro ($645.8 million) which will be used exclusively to cover old debts due for repayment this year, the finance ministry said.
The new Eurobond issued on February 8 bears annual interest of 6.25% which is significantly lower than the interest rates on already issued Eurobonds which are currently traded on international debt markets, the finance ministry said in a statement on Wednesday.
The new Eurobond's period to maturity was set at four years - a shorter payback period than the usual seven years, in order to reduce the annual cost of interest payments.
The interest rate on North Macedonia's newest Eurobond is the same as the interest on Eurobonds with a similar maturity issued at the beginning of this year by EU member states, such as Hungary and Romania, and candidates for EU membership, such as Serbia.
Investor demand for the new Eurobond, the country's ninth so far, was 2.5 times higher than the amount issued.
"In times of expensive financial markets, the strategy is to solely borrow the amount necessary to repay past debts, not the full sum of up to 800 million euro that has been approved," the finance ministry noted, adding that the government has to pay 594 million euro in principal plus 138 million euro interest to international creditors in 2023.
($ = 0.929 euro)