Portrait of an Ascending Sovereign Credit
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 Covid-19 support measures in 2021
Borrowing activities in international capital markets
in 2021
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 17, Latvia issued a new 10 year benchmark Eurobond in a total
amount of EUR 1,25 billion. Yield was set at 0.105%. Evidenced the
highest investor demand so far in terms of the number of investors and
final orderbook size
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.
Loans from international financial institutions and EU
Mid YTM, %
0.6
0.4
0.2
Latvia`s Secondary Eurobond Market
(mid yield to maturity, %)
0.26
0.45
0.02
0.11
0.0
-0.04
-0.11
-0.06
-0.25
-0.2
-0.14
-0.4
-0.32 -0.34
-0.40
-0.6
0.58 0.59
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 November 22, 2021, Bloomberg
Outstanding Eurobonds
(nominal amount, million)
2049
1.875% 19/02/2049
•
In 2020 Latvia signed a loan facility for the funding of extraordinary
government expenditure in order to mitigate the impact of the Covid-19
epidemic with Nordic Investment bank in amount of EUR 500 million. As of
today the loan is fully disbursed.
2047
2.250% 15/02/2047
2036
1.375% 16/05/2036
2031
0.105% 17/03/2031
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 amount of EUR 192.7 million.
2029
0,003% 24/01/2029
2028
1.125% 30/05/2028
2026
0.375% 07/10/2026
2025
1.375% 23/09/2025
.
According to Council Implementing Decision (EU) 2021/677 of 23 April
2021, the total amount of SURE support available for Latvia was increased
to EUR 305,2 million. As of today SURE support is fully disbursed.
2024
2.875% 30/04/2024
2023
0.125% 14/04/2023
0
200
400
30
Source: The Treasury
600
800
1000
1200
1400
Eurobond issuances in international capital markets in 2021
TAPS of existing Eurobonds in domestic market
Source: The Treasury (12.11.2021)
1600
1800View entire presentation