The Finance Ministry announced on Wednesday that a transaction to borrow money on the domestic market was completed after it issued a five-year bond worth 6 billion kuna at the interest rate of 2.75% and a 2.85% yield, which is the lowest yield since 2001 when the state first started to issue bonds on the domestic market.

"Owing to strong investor interest, which was two and a half times higher than the planned issue, and the quality offer, Croatia was able to issue bonds at the interest rate of 2.75% and a 2.85% yield," the ministry said in a statement.

The ministry underscored that this bond issue was carried out under exceptionally favourable conditions, notably given the fact that the issue was denominated in the national currency and matured in five years.

This is the second bond issue on the domestic market this year. In mid-March, the Finance Ministry issued the second tranche of bonds with the maturity date of 2026, amounting to HRK 4 billion, thus expanding a bond issue from December 2015.

The ministry also said that the date of the bond issue is 8 July. The bond matures in 2021.

"Funds collected through this bond issue will be used to refinance government bonds that mature on 22 July while the rest will be used for the general budget needs," the statement said.

A HRK 3.5 billion bond matures on July 22.

The latest bond issue was arranged by the Erste & Steiermaerkische Bank, Privredna Banka Zagreb, Raiffeisenbank Austria and Zagrebacka Banka, the ministry said, adding that the Croatian Postal Bank, Hypo Alpe-Adria-Bank, Sberbank and Societe Generale co-arranged the deal.

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