Latvia Stability Programme Report

31 FUNDING IN INTERNATIONAL CAPITAL MARKETS AND VIA BILATERAL LOAN FACILITIES IN 2021 Financing was ensured largely by capital market instruments, including the first Sustainability Bond under the Sustainability Bond Framework in line with the ICMA standards Borrowing activities in international capital markets in 2021 On March 17, Latvia issued a new 10 year benchmark Eurobond in a total amount of EUR 1,25 billion. Yield was set at 0.105%. On July 1, Latvia issued a new 7 year (long) benchmark Eurobond in a total amount of EUR 0.5 billion. Yield was set at 0.003%. Both transactions mark several records: (1) the lowest ever long-term borrowing yield reached, and (2) is the historically lowest coupon (0,000%) achieved by the Republic of Latvia in its Eurobond transactions. On December 6, 2021 Latvia issued debut 8 year (long) Sustainability Bond in amount of EUR 600 million, the first also from Baltics and Scandinavia region Loans from international financial institutions and EU facility related to Covid-19 in 2020-2021 In 2020 Latvia signed a loan facility with Nordic Investment bank for the funding of extraordinary government expenditure in order to mitigate the impact of the Covid-19 epidemic in amount of EUR 500 million. 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 signed loan agreement with EU in amount of EUR 192.7 million. According to Council Implementing Decision (EU) 2021/677 of 23 April 2021, the total amount of SURE support available for Latvia was increased up to EUR 305,2 million. As of today SURE support is fully disbursed. Mid YTM, % 3.0 Latvia`s Secondary Eurobond Market (mid yield to maturity, %) 2.43 2.5 2.32 2.13 2.58 2.67 2.74 2.0 2.25 2.04 1.41 1.88 1.5 1.72 1.0 1.03 1.23 0.5 0.26 0.0 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 ―LATVIA EUR Eurobond LATVIA domestic bonds Source: Data as of August 19, 2022, Bloomberg 2049 1.875% 19/02/2049 2047 2.250% 15/02/2047 2036 1.375% 16/05/2036 2031 0.000% 17/03/2031 2030 0.250% 23/01/2030 2029 0.000% 24/01/2029 2028 1.125% 30/05/2028 2026 0.375% 07/10/2026 2025 1.375% 23/09/2025 2024 2023 0 Outstanding Eurobonds (nominal amount, EUR million) 2.875% 30/04/2024 0.125% 14/04/2023 500 1500 Eurobond issuances in international capital markets in 2021 ■Sustainability bond, issued in 2021 1000 TAPS of outstanding Eurobonds in domestic market Source: The Treasury (01.08.2022.) 2000

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