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Lithuania may tap international debt market again at year-end

HSBC
„Reuters“/„Scanpix“ nuotr. / HSBC
Šaltinis: BNS
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Simonas Eimaitis, head of emerging markets syndicate desk at UK bank HSBC, the book-runner of Lithuania’s latest bond, projects that Lithuania will tap international debt market once again this year and claims that financial markets have never been closed to the country, the Verslo Žinios business daily reports on Friday.

According to him, Lithuania’s comeback to the euro borrowing market, in the opinion of many market players, is tantamount to a feat since there have been just several Eastern European countries with much higher credit ratings, such as Poland, Slovakia and the Czech Republic, which have managed to do the same this year.

Eimaitis says that he would not be surprised if Lithuania tapped the markets once more by the end of the year since the country would have to redeem 1 billion euros bond maturing in March 2013.

He noted that the country should get ready for refinancing at least several months in advance considering recent instability of the market.

Lithuania this week raised 400 million euros on international markets. The country issued a euro-denominated bond with 4.2 percent yield. Lithuania previously borrowed on international markets in euros three years ago and the annual yield on similar maturity bond then exceeded 9 percent.

According to Eimaitis, several last weeks signal that the liquidity euphoria on the markets is starting to wear off hence Lithuania was in time to “catch the train”.

“Speaking about the time chosen for borrowing, it is important to note that Lithuania will have to redeem 1 billion euros bond in May. If the investors are not offered new instruments after the redemption of these bonds, many of them are likely to shift their focus from Lithuania to other countries. It would divert the ... attention of those investing in euros from Lithuania. Hence this bond issue is a kind of cycle preservation, maintenance of ties with loyal investors. Lithuania used a short period of time when the investors were inclined to credit Lithuania and made a strategic step as it sought to retain existing investors,” Eimaitis said in an interview to the daily.

BNS
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