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Montenegro issues 200 million-euro eurobond

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(PODGORICA) - Montenegro has issued a eurobond valued at 200 million euros (254.9 million dollars) to cover its budget deficit, thus avoiding a loan from the International Monetary Fund, an official said Wednesday.

"It is our determination to have this type of debt in the long term. There is no need for an agreement with the IMF," Deputy Prime Minister Igor Luksic told reporters.

Luksic said the money obtained by selling the eurobonds would be used to finance Montenegro's public deficit, projected at 135 million euros, or 4.2 percent of its gross domestic product (GDP).

It will also be used to finance Montenegro's foreign debt, estimated at 719.8 million euros in 2009.

Montenegro's Central bank said GDP in 2010 amounted to 3.12 billion euros, while the authorities forecast a 0.5 percent growth this year.

Demand for ten-year bonds, with a fixed interest rate of 7.85 percent, was three times higher than the offer, Luksic said.

"Of 140 investors from 25 countries from Europe, Asia and the United States, 125 ... purchased Eurobonds," Luksic told reporters.

This is the first time Montenegro, which proclaimed independence from the union with Serbia in 2006, has issued eurobonds.

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