By Marta Vilar – MADRID (Econostream) – Latvia's Treasury is monitoring financial markets for a possible syndicated benchmark bond later this year, although regular auctions remain its baseline funding strategy for the remainder of 2026, according to Kaspars Āboliņš, director of the Latvian State Treasury.

In an interview with Econostream on 27 July 2026 (transcript here), Āboliņš said that Latvia had already completed around half of this year's estimated €3.8 billion funding program but remained prepared to take advantage of favorable market conditions through a syndicated transaction.

"Our base scenario for the remainder of the year is to continue with auctions, and we are monitoring the markets for a possible syndicated bond issue in the international capital markets," he said.

Looking ahead, Āboliņš said borrowing from the European Union's Security Action for Europe (SAFE) instrument would influence the amount Latvia ultimately raises in capital markets, with issuance adjusted to reflect the pace of defense-project financing.

"Considering that funding from the SAFE instrument will be available based on the progress in implementing eligible projects, we will adjust our capital market borrowing to reflect our actual financing needs during the year," he said.

Latvia recently signed a €3.5 billion SAFE loan agreement with the European Commission, with disbursements expected to continue through 2030.

Asked about Latvia’s issuance plans for 2027, he said the estimated borrowing volume in 2027 will exceed €4 billion, and the strategy will also remain flexible in terms of timing, currency and tenor selection.

“In regard to capital markets – our primary focus will be on benchmark-sized syndicated transactions and also regular auctions,” he said.

Discussing market conditions, Āboliņš said the Treasury currently favored the intermediate part of the curve when choosing maturities.

"I would say that in the current market environment this is the 7-year sector," he said. "We observed the strongest investor demand in this part of the curve, while this maturity gives balance between funding costs and refinancing risk."

The Treasury selected that maturity for both its €1 billion sustainability bond issued in June and its inaugural CHF bond launched earlier this month.

Following the successful Swiss franc transaction, Āboliņš indicated that Latvia would continue considering issuance outside the euro market whenever it improved funding conditions or broadened the investor base.

"We are open to funding opportunities in currencies other than EUR to support further diversification of our investor base and to meet strategic objectives, provided that such opportunities are attractive relative to EUR funding and contribute to the flexibility and resilience of our overall borrowing strategy," he said.

He also reaffirmed Latvia's intention to return to the USD market when conditions were favorable and issuance was cost effective relative to euro funding.