Latvia saves €85m in debt service costs

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On December 8 some of Latvia's dollar bonds were refinanced with euro bonds, saving the state about €85m in debt service costs until 2021, the Finance Ministry announced Wednesday.

On November 30 the state put up an offer about buying back its dollar bonds issued in 2011 and 2012. On December 8 the state bought $650m worth of bonds back and issued €550m in bonds with a five-year maturity date.

The dollar bonds partially bought back by the state had been issued in 2011 with a fixed yearly rate of 5.25%, and in 2012 with a yearly interest rate of 2.75%. The newly issued bonds, for which the demand was three times the supply, were euro bonds with a fixed yearly rate of 0.5% and a five-year maturity.

"The proactive actions in managing the state debt by partially refinancing USD loans with cheaper euro resources has allowed saving several tens of millions of euros in the state budget. Thanks to professional conduct of the State Treasury, the state took advantage of the unique situation in the finance market, achieving meaningful results for the state in debt management," Finance Minister Jānis Reirs stated in an announcement.

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