Portrait of an Ascending Sovereign Credit
Borrowing Strategy focused on prefunding and refinancing
Budget deficit and debt repayments make the most part of borrowing requirement in medium term.
Government Gross Borrowing (EUR million)
TOTAL 2 960
1 087
TOTAL 1 422
TOTAL 1 150
TOTAL 1 330
534
TOTAL 1903
TOTAL 1 500
156
737
1 873
621
888
529
593
2017
2018
2019
2020F
2021F
■Total gross borrowing
Pre-funding reserve
Source: The Treasury
Mid YTM, %
1 747
1 500
2022F
0.9
Latvia Secondary Eurobond Market (mid yield to maturity, %)
0.5
0.32
0.1
-0.10
-0.06
-0.11
-0.18
-0.3
-0.25
-0.42 -0.47
-0.34
-0.38
-0.51
-0.7
-0.97
-1.1
0.12
LATVIA EUR Eurobond
LATVIA domestic bonds
0.46
0.41
LATVIA USD Eurobond
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
Borrowing activities in international capital markets in 2020
On March 26, Latvia re-opened its outstanding Eurobond maturing 7
October 2026 by issuing EUR 550 million:
Yield was set at 0.406% and total amount outstanding EUR 1,5 billion
On April 6, Latvia priced a new 3 year benchmark Eurobond in the
international capital markets in a total amount of EUR 1 billion
•
Eurobond maturity 14 April 2023
Yield was set at 0.209%
Coupon was set 0.125%
Both transactions partly covered planned nescessary funding for 2020
including support measures to overcome Covid-19 crisis.
Source: Data as of 23 October 2020, Bloomberg
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