“We know 300 million euros is a necessity but we can jump to 500 (million). It depends on how we will see the market and the situation,” Finance Minister Shkelqim Cani told Reuters.
TIRANA, June 3 – The Albanian government is planning to borrow Euro 300 to 500 million in its second ever Eurobond or syndicated loan next year, depending on the mood of the market, Finance Minister Shkelqim Cani has told Reuters.
Speaking on the sidelines of a finance conference in Vienna this week, Cani said Albania had “many options” from which to choose and had started initial talks to sound out potential investors.
“Albania has not yet decided whether to borrow in dollars or euros and was “seeing options on both of them”, Cani said. “We know 300 million euros is a necessity but we can jump to 500 (million). It depends on how we will see the market and the situation,” he said.
“We can jump to get a syndicated loan, a loan, or a Eurobond. It is an open issue,” Cani, a former central bank governor, told Reuters.
The Albanian government had also previously announced it was planning to issue a new Eurobond in 2015 when its debut five-year Eurobond issued in late 2010 matures. The confirmation came last April after giant credit rating agency Standard & Poor’s upgraded Albania’s rating to B stable and the Albanian government signed a three-year deal with the IMF on fiscal consolidation supported by a Euro 331 million deal which will be used to pay off accumulated unpaid bills.
Speaking to VoA in the local Albanian service, Finance Minister Shkelqim Cani said earlier S&P’s revised rating favoured Albania’s position in international markets.
“Of course, the rating by Standard & Poor’s also influences on international markets, where the Albanian government is present with the Eurobond. Next year, we will enter international markets because of the maturity of the previous Eurobond and we are taking all measures on this,” said Cani.
“S&P’s rating is also confirmation that we are on track to improving conditions regarding the issue in the international market. This is also valid for the internal market,” added Cani.
In late 2010, Albania issued its first-ever Eurobond of 300 million euros with a maturity of up to five years and an interest rate of 7.5 percent.
The money was mainly used to pay off a costly syndicate loan taken last year to fund the costly Durres-Kukes highway linking Albania to Kosovo.
The debut Eurobond issue in November 2010 came as international financial markets stabilized and after some changes were approved in Parliament to the government deal with Deutsche Bank AG and JPMorgan Chase & Co. which managed the Eurobond sale.
Public debt, including government arrears at 5 percent of the GDP, is estimated to have climbed to 70.5 percent of the GDP in 2013, and is expected to further climb to 72 percent of the GDP before going on a downward trend starting 2015, according to the 2015-2017 macroeconomic and fiscal framework.
The Albanian government and the IMF expect public debt to climb to 71.6 percent of the GDP in 2014, before dropping from 71.1 percent in 2015 to 57.1 percent in 2019. Total debt service is expected at 66 billion lek (Euro 462 million), more than three quarters of planned 84 billion lek in investments for 2014.
External borrowing by the government of Albania consists of multilateral and bilateral official credits, syndicated bank borrowing, and a Eurobond.
