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Albania Issues First Euro Denominated Bond At 300M

News Posted On: 24 November 2010

Albania has issued its first ever Euro denominated bond, the government has confirmed. The 300m Euro bond, which offers an interest rate of 7.5% is set to mature in 5 years time.

"This is an historic moment not only for our government, but for all Albanians. Issuing of the Eurobond in this coupon and interest rate confirms the credibility to the Albanian economy," said the Albanian minister of finance, Ridvan Bode.

The Finance Ministry said that they had been given authorisation to issue a 400 million euro bond, but had decided on 300 million after their analysis of the debt portfolio, as well as the euro bond interest rate.

The bond issuance, which is being managed by Bank AG and JPMorgan Chase & Co was originally supposed to happen in April, but it was wisely postponed because of the sovereign debt bomb that exploded in Greece.

"The markets will enjoy the Eurobond of Albania. We think the timing is perfect," said Albanian Central Bank Governor Ardian Fullani for Reuters.

"Now is probably the right moment to come with a new issue," Stuart Culverhouse, chief economist at Exotix Ltd., an investment bank, said for Bloomberg. "The 7.5% yield is "reasonably attractive", he said.

Official sources at the finance ministry say the Eurobond will be used to pay-off a 250 million euros syndicated commercial loan taken in 2009, with a 13% interest rate.

This truly is a huge step in Albania's economic development, as well as its integration of the former Soviet satellite with Europe. In 2006 Albania was given middle income status, and began taking loans from international banks, to now be issuing Euro denominated bonds shows us all just how far it has come -- of course sales will be the real indicator.

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