MNI INTERVIEW: Estonia Likely To Favour Longer Maturities

Estonia is likely to favour longer maturities in upcoming bond sales, as the average repayment period of its debt portfolio has remained relatively short due to infrequent issuance, State Treasury Head Janno Luurmees told MNI in an interview.

"We have issued only three benchmark bonds," he added, so "issuing in the 10-year maturity bracket would be kind of logical, but I wouldn't exclude also longer maturities if the markets are favourable."

The mix of maturities will be determined by demand from investors, he added, but there is currently good demand for Estonian bonds thanks to the country's infrequent issuance. (See MNI INTERVIEW: Euro To Help Bulgarian Debt Spreads)

"It shouldn't be a big problem to have one benchmark issuance every year, of EUR1 billion or EUR1.5 billion for the next four or five years," he said.

"We will have to be flexible," he said, adding that as Estonia’s parliament has not yet passed the 2026 budget "there can be changes." (See MNI: Ireland Expects Issuance To Renormalise - Debt Office)

DEFENCE FUNDING

The European Commission’s tentative allocation of a EUR2.66 billion loan from the European security measures programme (SAFE) for defence spending, should mean that more issuance is not needed for boosting the country’s military budget, Luurmees said.

"At the moment, it looks like this is quite okay for us, it's quite enough for us, taking into account all the plans that we have in the area of defence, and that we can also finance with our other instruments," he said.