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Serbia to Pick Two Eurobond Advisers This Month, Djokovic Says

June 02, 2011

June 2 (Bloomberg) -- Serbia will select advisers by the end of this month to prepare its first-ever Eurobond sale, Deputy Finance Minister Vuk Djokovic said.

The government of Prime Minister Mirko Cvetkovic plans to raise up to 700 million euros ($1 billion) in the sale “by the end of September or early October,” Djokovic said in a phone interview today. “We have received 12 offers and plan to choose two advisers by the end of this month.” He wouldn’t name bidders.

Serbia has stepped up borrowing this year on the domestic market, encouraged by growing investor interest in yields of more than 10 percent on dinar-denominated debt. The government had to increase debt after it refused to sell a controlling stake in Telekom Srbija AD to Telekom Austria AG as the offer trailed the 1.4 billion-euro asking price.

The Eurobond will consist of two parts, one worth “around 500 million euros in a foreign currency and the other of up to 200 million euros in dinars,” he said.

Serbia is “open” to the advisers’ proposal on how to structure the issue, as well as how to resolve clearing and settlement issues for the dinar, which is still neither fully convertible nor traded internationally, he said.

Dinar-denominated trades can now be settled only through the Serbian Central Securities Depository and Clearing House.

The government is looking at the U.S. dollar for the larger portion of the issue, Djokovic said.

“The dollar seems to be very attractive these days and there’s a great probability that our bond issue will be in dollars,” he said.

The Serbian government will sell the bond just months after its neighbors, Croatia and Romania, will sell their Eurobonds.

“Overall, the sentiment for sovereign borrowing is positive and we expect our bond issue to be attractive for investors,” Djokovic said. “A year ago, you could not imagine German banks or French banks buying Serbian debt. Now they do,” he said, referring to debt issues sold on the domestic market.

--Editors: Andrea Dudik, James M. Gomez.

To contact the reporter on this story: Gordana Filipovic in Belgrade at

To contact the editor responsible for this story: James M. Gomez at

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