Issuing US$-denominated bond could attract new investors

Podgorica, (MINA-BUSINESS) – Tomorrow, Montenegro will issue US$-denominated bond for the first time in the international financial market.


According to director of the financial markets sector at Hipotekarna Bank Gojko Maksimovic, this could attract new investors who will invest in public debt.

“So far, the Ministry of Finance has issued several series of bonds in the international market, all denominated in euro as the domestic currency. In this regard, tomorrow’s issuance gains even more significance, as we will quickly obtain the market price of Montenegro’s public debt in US dollars,” Maksimovic posted on his LinkedIn profile.

He reminded that this would not be the first borrowing in US dollars, considering the credit line with the Chinese Exim Bank.

“It is planned that the bond will have a maturity period of seven years, meaning its maturity will be in 2031, and the issuance can be expected in the amount of 500 to 700 million US dollars, which would also be the maximum debt defined for this year, adopted through the budget of Montenegro,” Maksimovic said.

He explained that issuing bonds in a currency different than the domestic one was not an unusual transaction in international markets.

Some of the reasons for this are the cost of borrowing, achieving better conditions for borrowing in foreign currency compared to the domestic one, generating future revenues in foreign currency, as well as attracting a new group of investors into the financing process.