Exclusive: Estonian Treasury Department Head: No More Eurobond Issuance Planned for 2024

29 May 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Estonia has concluded its Eurobond syndications for this year but has plans for a final T-bill auction in the autumn, according to Janno Luurmees, who heads the Estonian State Treasury Department.

In an interview with Econostream (transcript here), Luurmees said, ‘We likely do not need to issue Eurobonds for the remainder of this year. However, we plan to hold one more T-bill auction in the fall.’

Estonia’s €1 billion 10-year bond issued in early 2024 was highly successful, as it was oversubscribed by 7.2 times, he said. ‘The final order book exceeded €7.2 billion from 180 individual investors.’

The oversubscription of the country’s latest benchmark bonds proved that the demand for Estonian government bonds had recovered to its pre-war levels after experiencing a decline caused by Russia’s unjustified invasion of Ukraine in 2022, Luurmees said.

Asked about Estonia’s share of foreign demand, Luurmees noted that most of the demand came from foreign investors. ‘We are pleased with the substantial oversubscription of our bond issues, which demonstrates the trust foreign investors have in our country.’

According to Luurmees, the Treasury has been preparing to issue bonds for local retail investors and is expecting to ‘test the local market later this year’.

‘While we are not facing any serious problems for the next 4-5 years, politicians must make several unpopular decisions to return to a more conservative fiscal policy in the long run. As long as the government remains committed to this goal, Estonian public finances will remain sound, and the country's debt level will continue to be one of the lowest in the EU as a percentage of GDP’, he said.