Lithuanian Finance Ministry redeems EUR1.3bn bond issue

The finance ministry redeemed EUR1.3bn worth of bonds issued on international markets, thus reducing the state debt by 3.1pps of the projected GDP in 2018, according to information provided by the ministry to BNS. The redemption relates to an issue launched in Oct 2007 for EUR600m which was later on topped twice by 2 issues worth EUR400m each, thus making the nominal value of the issue worth EUR1.4bn carrying an interest rate of 4.85%. The issue was redeemed through the money borrowed from international markets in 2017 at a much lower interest rate as the government managed to borrow EUR1.85bn through issues in May and November in 2017. To note, the 10-y issue in 2017 was placed with an interest rate of 0.95% while the 30-y issue was placed at 2.1%.

In 2018 the government plans to issue EUR .46bn of which EUR1.1bn will be borrowed on domestic markets and the remaining EUR0.36bn on international markets. Debt repayments in 2018 are estimated at EUR2.22bn of which EUR1.57bn of foreign debt. Lithuania’s state debt is projected to decline to 36.5% of GDP at the end of 2018.

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