Published: December 6, 2013
Montenegro to make trip to the market amid economic uncertainty.
Montenegro is aiming to raise €800mn (US$109mn) of bonds due in 2016, according to a prospectus filed with the London Stock Exchange. The issue date has been set at 9 December, with Morgan Stanley acting as sole bookrunner.
Montenegro is a high risk proposition. After showing signs of growth in 2010 and 2011, the country’s economy declined 2.5% in 2012 due to the effects of the slowdown in the Eurozone.
The government acknowledges this in the prospectus, admitting that very high levels of public debt, vulnerability to external shocks and the slow pace of political and economic reform – among other factors - mean that it “may not be able to refinance its debt on favourable terms or at all”.
The country has gone to the market before. In January 2011 it raised US$180mn in 5-year bonds with a coupon of 7.250%. With the tapering of quantitative easing likely to start sooner rather than later, this could be Montenegro’s best chance of a repeat performance.