‘The state budget for next year includes new economic and fiscal policy measures arising from the environment around us, although tax revenues will not be sufficient to cover all of the spending’ said Sven Kirsipuu, Deputy Secretary-General for Fiscal Policy at the Ministry of Finance. According to him, the money being borrowed in the course of the bond issue will provide assurance that the state will also have a sufficient financial buffer to cover its costs next year. Interest in Estonian bonds has been high in the past, but at the moment the uncertainty in the financial markets must also be taken into account.
‘Speaking in our favour are the facts that Estonia has strong fiscal discipline, low debt levels, as well as a stable and well-capitalised banking sector, which are reflected in its high credit rating. The risks relate to the broader security situation in Europe and the weaknesses commonly found in developed countries, which are considered to be ageing societies and declining population numbers,’ the Deputy Secretary-General explained.
Estonia last issued long-term bonds in the amount of EUR 1.5 billion – to cope with the corona crisis, in 2020 – after an interval of 18-year.
The bond issue is organised by Citibank, Goldman Sachs and Societe Generale. The bonds are set to be listed on the Dublin Stock Exchange, in order to make it easier for international investor interest to materialise. The volume and interest rate of the bonds will be determined at the time of issuing, being dependent on both market interest rates and investor demand.
