The drop in the prices of Montenegrin euro bonds on the international stock exchanges does not affect the increase in the costs of existing debts, and the state does not have any additional costs. If, for some reason, the state would have to borrow more on the international market this year or next year, and the current trend remains, this could affect higher interest rates, i.e. more expensive future debts, Montenegrin broker Aleksandar Jovović told "Vijesta".
Some of the earlier buyers of Montenegrin Eurobonds sold them during this week below prices by about 2,5 percent, but their value started to return to the previous level yesterday.
When the government issues and sells bonds, it is already defined when they mature, that is, when the government will have to buy them back and with a precisely defined interest yield. For example, in December, the government issued Eurobonds on the basis of which it borrowed 750 million euros, which it needs to pay back in seven years with an annual yield of 2,87 percent.
In the meantime, those who bought the bonds can sell them on the stock exchanges for the price on the market, and the Government will buy them back from whoever will be their owner at the time of maturity - in seven years.
The sale of bonds before the maturity date below the price may mean that the investor has lost confidence in the issuer or that the buyer has accepted money at that moment. The third possibility is that someone "shorted", i.e. deliberately caused a drop in value by brokering in order to buy them cheaper and thus make money.
The Director of the Financial Markets Sector at Hipotekarna Banka, Gojko Maksimović, warned about this phenomenon two days ago on social networks, stating that the Government representatives must know the weight that spoken words have on investors and what consequences they leave on the international market. Some domestic media, as well as the DPS, accused yesterday that this decline was due to the statement of the Deputy Prime Minister Dritan Abazović that the EU should repay the Montenegrin loan for the highway, although the Government was in fact looking for the possibility of rescheduling the loan from the EU banks because the former government took loan in dollars from the Chinese Exim Bank.
The Minister of Finance, Milojko Spajić, said several times during this week and the previous week that the Government has no problem in returning this loan, but the problem is that it was contracted in dollars and that this makes it unfavorable due to exchange rate differences, as well as that the former Government "forgot" to extend the loan agreement when it extended the deadline for the completion of the works. The loan agreement expired on April 14, when the government would have frozen 128 million euros, so it would have to provide additional money for the completion of the remaining works on the highway.
This year, in July, the first installment for the highway is due, which with interest amounts to almost 40 million euros. Since the issuance of bonds of 750 million euros in December, the Government paid in January a part of the old debt that was due for collection of about 350 million euros, so that there are now about 400 million in deposits. Spajić previously said that the Government will not need to take on additional debt this year and the next.
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