Economy Minister Radimir Cacic said on Friday that by issuing a US$ 500 million bond on the world market, the Croatian power utility company HEP became globally present in investment terms.
Speaking on Croatian Television, he said this was the first transaction of a state-owned company on the global market.
"Such high interest is virtually unprecedented and is especially interesting given the fact that HEP's rating has been downgraded," Cacic said, adding that the company could have received $2.7 billion had it asked.
He said more than 200 of the world's biggest investors were present at the issuance and that only the most reputable banks and funds were among the top ten, which meant that every HEP investment would be done under world rules.
Cacic said such interest was a very strong message showing that there was always money on the market, in huge amounts, if the state had quality projects.
Foreign investors look to the future and finance projects they believe in, he said, noting that there had been no sovereign guarantee in this HEP transaction.
HEP set the price terms of the eurobond issue at $500 million, with a six per cent coupon, a six per cent return, a 100 per cent issuance price and maturity in 2017. Cacic said the state had not achieved such a price in the five years since the economic crisis began.
He underlined as especially important the trust not only in the company but also in the state. "That shows that the Croatian state, because HEP is a state company, has an outstanding reputation."
Reporting on the bond issuance earlier in the day, HEP said the money from it will be used to refinance its debt, finance investments and for general corporate purposes.
The issue was jointly arranged by Morgan Stanley and UniCredit/Zagrebacka Banka, while Raiffaisen Bank International AG was co-arranger, HEP said in a statement.
