Statement of Mr. Damir Rašketić, State Secretary for the portal "Analitika”

The Ministry of Finance is preparing for the Project of issuing sovereign Euro bonds worth 150 to 200 million Euros, and plans to complete this activity in the first half of the current year, i.e., in June 2010. Funds obtained from the issuance of sovereign Euro bonds will be used for covering the budget deficit. The State Secretary in the Ministry of Finance, Mr. Damir Rašketić said, that the Ministry of Finance has sent information to international financial institutions being the potential investment banks for the issuance of bonds. Following the completion of this operation we will inform the public on potential institutions. Furthermore, selected investment bank must be recognized international financial institution with proper foreign contact points attracting the biggest number of investors, said Rašketić. Risks and advantages in issuing bonds: Rašketić’s opinion is that the Euro bonds represent the most transparent landing option of any state. – Any type of landing bears a certain risk, but it is worth mentioning that the Euro bonds are both the most solvent and transparent lending option, representing a long term security for purchaser, being payable on securities market at price of several thousand billion Euros, explained Rašketić. According to the Ministry of Finance, the key advantage of this type of lending model is the significant demand for the sovereign bonds. – There is a minimum failure risk at the Euro bonds market. The best illustration behind this statement is the recent case of Greece. Euro bonds are the most solvent type of lending, being considered as more proper solution against debtor-creditor instruments, representing a solvent security to investor payable on a daily basis, prior to maturity date, says Rašketić. Montenegro would for the first time emerge the European market, which would simultaneously represent a chance for investors who up to now did not invest in Montenegro, to become familiar with its potential. – Montenegrin’s entrance to the Euro bonds market, would for sure produce opportunities to our financial institutions and business entities, said Rašketić. The Ministry of Finance opts for the IMF and bonds: Euro bonds are not the alternative to the IMF arrangement, thus the Ministry of Finance supports the combination of these two models. – Of course, we should wait for the Decision of the Government on the potential arrangement with the IMF. Nevertheless, funds obtained from Euro bonds will be used for covering the budgetary deficit and debt servicing, and we won’t have to disburse potential funds from the IMF arrangement immediately, this could be done in the following year. In my opinion, both models are good, sending a message to investors that Montenegro is an attractive and secure investment destination, emphasized Rašketić. Experience of the countries in the region: Rašketić explained that Montenegrin model of issuing bonds is similar to the model applied in other countries of the region, such as Croatia, Macedonia and Slovenia. – Slovenia invested its Euro bonds with the interest rate of 2, 75% and maturity date by 2015, provided however that Slovenia is the EU and Euro - zone member state, with much higher credit rating, representing much lower investment risk for purchasers of bonds, said Rašketić. The issuance of Slovenian bonds was jointly managed by the Abanka Vipa, Commerzbank, British Royal Bank of Scotland and Societe Generale, issued by the Ministry of Finance. If we know that Societe Generale Bank is operating in Montenegro, being the owner of Podgorička bank, than, according to information of the Portal Analitika, it should not be of surprise if this financial institution would have been the leader of the project of issuing Montenegrin bonds. Maturity dates and interests may be addressed only after completing negotiations with investors.
- The essence of the overall project is not a mere provision of money, but a good promotion of Montenegro among future investors, concluded Rašketić.