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Republic of Latvia raises EUR 1.250 billion funding in international capital markets

Created : 11.03.2021.
On Wednesday, 10th March, Latvia priced 10-year Eurobond with a total amount of EUR 1.25 billion, setting a yield at 0.105% and a coupon 0.000%.

The transaction marks several records: (1) the lowest ever long-term borrowing yield reached, and (2) is the historically lowest long-term and the lowest coupon achieved by the Republic of Latvia in its Eurobond transactions. With this offering requiring no coupon payments during life of the bond, Latvia has become a third sovereign out of CEE to issue bonds with 0.000% coupon and a second one to place such bonds in a 10-year tenor bracket.

Minister of Finance Mr. J.Reirs: “With this transaction we have raised significant amount of long-term funding on favorable terms. This is the first transaction from our 2021 funding plan in international markets, as we have to cover Covid-19 mitigation and economic support measures related to the Covid-19 pandemic, as well as other budgetary needs, and duly fulfill the entirety of government debt liabilities.”

The Eurobond offering evidenced the highest investor demand so far in terms of the number of investors and final orderbook size. As a result of an appropriately deployed execution strategy and supportive market backdrop, the Republic of Latvia managed to attract more than 100 high-quality investors showed interest reaching demand with the orderbook reaching EUR 2.8 billion.

Eurobond offering was allocated to European investors, mainly asset managers and banks from Germany, France and Great Britain the United Kingdom, constituted the backbone of the final allocations.

The Joint Lead Managers acting on the deal were Barclays, BNP Paribas and Credit Agricole CIB.

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