On Wednesday, the government issued 10-year bonds worth one billion euros. The coupon interest rate of the bonds was 3.25% per annum and their repayment term is January 2034.
Interest in Estonian government bonds turned out to be higher than expected, as almost 180 investors wanted to subscribe to bonds worth more than 7.2 billion euros. Bond buyers are mainly European banks, pension funds and investment funds.
“Estonia ended up issuing long-term bonds on the same day as Spain. Of course the volumes differ, but investors are very interested in both. The interest rate was 3.35% for Estonia, 3, 26% for Spain,” Müller wrote on social media.
He said that until the first half of 2022 loans were cheaper for the Estonian state than for Spain. “After all, investors reassessed the relative risks of countries after Russia’s attack on Ukraine. But perhaps the relatively weaker state of the Estonian economy also plays a role,” Müller noted.
However, the comparison with the Baltics is more positive for Estonia. “Interest rates have increased in Europe for all governments. Compared to the three Baltic countries, debt is still a little more favorable for Estonia,” Müller underlined.
Eesti President Pank stressed that borrowing is no longer cheap for the government and that this must be taken into account when planning the state’s finances. At the same time, Müller stressed that of the almost billion euros borrowed on Wednesday, 325 million euros in interest will have to be paid over ten years.
2024-01-12 15:50:16
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