Tirana Times
TIRANA, May 25 – The Finance Ministry says it watching the financial markets every day and will wait for the appropriate moment to issue the country’s ever Eurobond. “We don’t have any emergency to issue the Eurobond. We will issue it in the most opportune and favourable moment for the public finances and the public interest,” said Xhentil Demiri, the debt director at the Finance Ministry this week.
The only emergency for the issue of Eurobond could be the payment of a syndicate loan government took to finance the Durres-Kukes road last year, but as the deadline for the payment of the next installment has expired the Finance Ministry sees no other reason for emergency.
The debt director said the ministry was monitoring the situation with Eurobond managers JP Morgan and Deutsche Bank and would wait until the markets stabilize and interest rates fall.
This is Albania’s second attempt to emit Eurobonds after an effort in early 2009 was abandoned due to the global financial crisis, forcing the Ministry of Finance to opt for a costly syndicated loan.The Ministry selected two international banks in March 2009 from which it borrowed 250 million euros. The loan was intended to finance the Rreshen-Kalimash highway which links Albania with Kosovo,
Albania was expected to issue the bond by the end of last April but delayed in the face of soaring bond yields caused by the Greek debt crisis.
Government plans to raise as much as 400 million euros ($532 million) of bonds in a debut international offering postponed by two years because of the global financial crisis. Deutsche Bank AG and JPMorgan Chase & Co. are managing the sale. The Finance Ministry will use almost 200 million euros to pre-pay a syndicated loan, according to a statement. The bonds are to mature in 3 to 5 years with an interest rate of up to 7.5%.
Opposition claims Eurobond interest rate raised secretly
TIRANA, May 23 – The Albanian opposition claims the Albanian Parliament has secretly passed a bill raising the interest rate of Albania’s first ever Eurobond to 8.5 percent, changing the terms of the debt government intends to get from the international markets.
“The law which parliament has passed increases the interest rate ceiling from 7.5 to 8.5 percent which means that the cost of debt the Albanian citizens will have to pay in the next five years increases by 18 percent within three weeks,” said Socialist Party lawmaker Erion Brace. According to him, the increase in interest rates proposed by government is not the only risk Albania faces.
The law approved on May 6 is accompanied by a secret letter the banks mandated to issue the Eurobond have sent to government.
“In the letter, the two banks warn government of increased financial risks to an extreme degree,” said Brace, adding that the failure of Eurobond would seriously affect the stability of government finances and keeping public debt under control.
