Albania rules out Eurobond issue for next two years

TIRANA, Nov. 30 – With Eurozone debt crisis escalating and bond yields at their highest levels, the Albanian government has ruled out the possibility of issuing a second Eurobond for the next couple of years.
Xhentil Demiraj, the debt director at the Finance Ministry says it will be dangerous if Albania sells Eurobonds after the Euro 300 million bonds sold late in 2010 at an affordable 7.5 percent yield.
The situation in international financial markets during the end of this year appears more critical as the debt crisis in neighboring Greece and Italy, which have formed caretaker governments to handle the critical situation. The Albanian government has already paid 22.5 million euros in the first Eurobond installment, local media report.
Xhentilaj’s statements come after declarations by Prime Minister Sali Berisha saying that government is unlikely to sell bonds in the overseas market this year as a deepening European debt crisis erodes demand for emerging-market debt.
“If we need, we will go to the Euro market, although the climate is not the best,” Berisha told Bloomberg in an interview in New York last September.
Yields on Albania’s 300 million Euros ($409 million) of 7.5 percent bonds due in 2015 jumped 69 basis points, or 0.69 percentage point, in the past month to a record 9.6 percent, according to data compiled by Bloomberg. The government sold the securities on Oct. 28, 2010.
Albania’s debt stands at the legal ceiling of 60 percent of the GDP.