By Marta Vilar – MADRID (Econostream) – Estonia will become a more regular issuer with one or two benchmark bond transactions per year, according to Janno Luurmees, Head of Estonia’s State Treasury Department.

In an interview with Econostream on 3 June 2026 (transcript here), Luurmees said that the new 10-year bond issued in early May had been “highly successful” oversubscribed by more than two times.

“Aligning our issuance structure with the standard practice of most Eurozone sovereigns, while maintaining excellent investor demand and tight pricing, clearly demonstrates international markets' deep confidence in Estonia,” he said.

Asked whether the May 2036 bond was intended as a one-off transaction or marked a shift toward more regular euro benchmark issuance, Luurmees said it was the latter.

“This issuance was not a one-off,” he said. “Due to our financing needs over the coming years, we plan to become a more regular issuer, aiming for one to two benchmark transactions per year.”

Following this transaction, Estonia’s main funding needs for 2026 were largely covered, Luurmees said, adding that the treasury’s market activity for the remainder of the year would focus on regular short-term T-bill auctions and ECP issuance aimed at managing short-term liquidity.

He described another international long-term issuance this year as “unlikely”, given that Estonia’s funding target had already been met.

Pre-funding for 2027 was not Estonia’s baseline, but Luurmees said there was some flexibility if market conditions became “exceptionally favorable” toward the end of this year.

Regarding the size of benchmark deals, he said investor feedback confirmed that €1 billion was the minimum size needed to ensure appropriate secondary-market liquidity.

“While a larger size would be even better for liquidity, our relatively small absolute financing needs mean that a range of €1 billion to €1.5 billion is currently the optimal benchmark size for Estonia,” he said. “It strikes the right balance between meeting investor demand and managing our actual funding requirements.”

Luurmees said the 10-year sector was currently Estonia’s “sweet spot”, as it offered “the best balance between investor liquidity and portfolio duration targets.”

However, he did not rule out issuing in longer maturities in the future as Estonia’s funding needs and market presence increase.

Asked about the treasury’s plans for green, sustainability-linked and defense-linked bond issuance, he said Estonia was closely monitoring developments in the thematic bond market, although the conventional euro benchmark market remained the most cost-effective and liquid option.

“Developing a green or defense-specific framework requires significant administrative setup and regular volume,” he said. “We will consider it if the economic benefit and scale make sense for the state.”

Regarding foreign currency issuance, Estonia was not actively considering issuance in foreign currencies because euro demand was sufficient to cover funding needs, he explained.

“However, we remain flexible and would consider foreign-currency issuance if market conditions provide exceptionally favorable financing opportunities,” he said.