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25.09.2020.
Following the decision of its Shareholders’ Assembly of 15 September, Telekom Srbija a.d. Beograd issued today, on 25 September, its first corporate bonds, garnering huge success. The five-year bonds worth RSD 23.5 bn were issued at an interest (coupon) rate of below 4% (3M BELIBOR+2.95 pp, i.e. 3.97%). Telekom’s bonds are entirely dinar-denominated and free of any FX risk, which means that the company was prudent and responsible in its actions in terms of minimising market risks to the greatest possible extent. The fact that five-year bonds were issued at an interest rate of below 4% indicates that the company recognised the right timing for tapping the domestic capital market. The demand for bonds was more than sufficient, attesting once again to the confidence qualified investors have in the company’s business. Telekom seized the moment of market conditions stabilisation, notably of monetary stability despite the ongoing coronavirus pandemic.
In accordance with the Law on the Capital Market, the buyers of these bonds are qualified investors, i.e. selected banks operating in the Republic of Serbia with which Telekom Srbija has cooperated for years. Let us reiterate that qualified investors are renowned financial institutions, which have a continuous insight into the company’s business operations and are fully acquainted with domestic and global macroeconomic developments and financial market conditions, as well as with all the advantages and risks implied by this type of investment. In a nutshell, in terms of their characteristics, these investors are best suited to invest in the securities of a strategically important company in the majority state ownership.
The funds raised will be used to finance the company’s business needs, including the advancement of business activities and refinancing of financial liabilities. The confidence displayed by professional investors on this occasion is yet another proof of the stability of Telekom’s operations and of the space that has been created not only for the consolidation of the business ventures undertaken thus far, but also for new investment into further improvements.
Corporate bond issue enables diversification of the company’s financing, in line with the best practices in the telecommunications industry worldwide. These bonds will therefore be an optimal complement and alternative to existing banking arrangements and the company will be able to fully use all of their advantages compared to loans, particularly the fact that only interest is paid until the bond maturity date, without the appertaining part of the principal, which will relax cash flows additionally.
Governor's Office
