TIRANA, Nov. 4 – The Albanian government says it has paid off its inaugural €300 million five-year Eurobond which matured this week and will be closely monitoring markets for a more favourable moment to raise up to €500 million.
Albania’s finance ministry said it used a €250 million loan it took out earlier this year from Deutsche Bank and €50 million raised in government securities in the domestic market to pay off €325 million, of which €300 million in principal and €25 mln in the last installment of interest rates. The payment was made on Nov. 4, when the Eurobond matured.
Authorities say they will keep watching markets to raise €300 million or more in a five to seven-year Eurobond denominated in Euro or USD to refinance the five-year inaugural €300 million Eurobond which matured in Nov. 4 2015. The new Eurobond issue was marred by the rising interest rates fuelled by escalating debt crisis in neighbouring Greece.
The Albanian government reselected Germany’s Deutsche Bank and U.S.-based JP Morgan Chase as lead managers of the country’s new Eurobond after the two leading lenders successfully managed Albania’s debut five-year Eurobond of €300 million in late 2010.
The finance ministry had initially set the end of July 2015 as the deadline for the Eurobond issue.
“Every delay in the Eurobond issue date and its postponement to the maturity date would be accompanied by an increase in interest rates,” said the ministry responsible for the Eurobond issue.
Last April, Albania selected Deutsche Bank, Germany’s biggest bank, for a €250 million 10-year loan to support public investments and cover its budget deficit.
Deutsche Bank lent the Albanian government €250 million in a 10-year loan initially intended to support public investments and cover the budget deficit. The finance ministry said it will pay Deutsche Bank an interest rate of 1.3 percent above the benchmark rate currently at 0.5 percent.
Under the deal, the Albanian government will also pay a 1.25 percent commitment fee for the 10-year loan with an average life of 8.6 years.
Albania is rated B1 by Moody’s and B by Standard & Poor’s.
