Serbia's Erste Bank to issue 2.1 bln dinars (18.6 mln euro) in 2-yr bonds

The bonds will be issued at par value of 10,000 apiece with a maturity of 731 days. The interest rate is fixed at 15% in nominal terms and 15.87% effectively, the Novi Sad-based lender said in a statement.

The bond auction will be held on November 6, 2012.

“[..] The raised funds will be used primarily for lending to retail clients, but also to corporate clients [..]. We are proud to be the first bank in Serbia issuing its own bonds by public offering, and that the sale will be conducted by auction in the primary market of the Belgrade Stock Exchange, which is also a novelty," the chairman of the executive board of Erste Bank, Slavko Caric, said.

The official added the move would also contribute to the dinarisation of the Serbian financial system, the expansion of the range of bonds traded on the Belgrade Stock Exchange and would thus stimulate trading on the domestic capital markets.

Secondary trading with the bond will be possible on the regulated market of the Belgrade Stock Exchange and the over-the-counter market.

(1 euro=113.1194 Serbian dinars)