Latvia's Economic Response to Covid-19
Borrowings in international financial markets and bilateral loan facilities related
to Covid-19
On the back of Covid-19 outbreak, necessary funding was ensured to finance Government approved support measures in
2020
Borrowing activities in international capital markets in 2020
In order to swiftly react to the Covid-19 outbreak and ensure liquidity to
finance the Government measures to support society, entrepreneurs and
economic activity as a whole:
On March 26, Latvia re-opened its outstanding Eurobond maturing 7
October 2026 by issuing EUR 550 million. The yield was set at 0.406%.
Amount outstanding of October 2026 bonds after that tap reached EUR 1,5
billion.
On April 6, Latvia priced a new 3 year benchmark Eurobond in a total
amount of EUR 1 billion. Yield was set at 0.209%.
Mid YTM, %
0.4
Latvia Secondary Eurobond Market (mid yield to maturity, %)
0.46
0.43
0.2
0.18
0.0
-0.2
-0.24
-0.22
-0.39
-0.33
-0.4
0.43
-0.48
-0.6
-0.56
0.17
Loans from international financial institutions and EU
In 2020 Latvia signed a loan facility with Nordic Investment bank in
amount of EUR 500 million. The loan facility has been granted for the
funding of extraordinary government expenditure in Latvia in order to
mitigate the impact of the Covid-19 epidemic. As of today the loan is fully
disbursed.
In 2020 taking into account EU coordinated response to the Covid-19 by
offering a new instrument for temporary support to mitigate
unemployment risks in an emergency (SURE), Latvia took an opportunity
and signed loan agreement with EU in account of EUR 192.7 million. As
of today the loan is fully disbursed.
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
LATVIA EUR Eurobond ―LATVIA USD Eurobond - LATVIA domestic bonds
Source: Data as of 22 February 2020, Bloomberg
EUR
USD
Outstanding International Bonds (nominal amount, million)
2049
1.875% 19/02/2049
2047
2036
2.250% 15/02/2047
1.375% 16/05/2036
2028
1.125% 30/05/2028
2026
0.375% 07/10/2026
2025
1.375% 23/09/2025
2024
2.875% 30/04/2024
2023
0.125% 14/04/2023
2021
5.250% 16/06/2021
0
200
400
600
800
1000
1 200
1 400
1 600
30
Source: The Treasury
Eurobond issuances in international capital markets in 2020
TAPs of existing Eurobonds in domestic market during Oct 2020 and February 20219
Source: The Treasury (22.02.2021)View entire presentation