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Croatia starts accepting bids for HRK 2.5 bln 10-year bonds

Croatia began accepting bids for the sale of 10-year bonds worth 2.5 bln kuna ($441.8 mln), Erste&Steiermaerkische Bank d.d. Rijeka, one of the banks managing the transaction, said in an e-mailed statement.

The bonds with a fixed 4.75% coupon, to be paid semi- annually, will be sold on February 8 and the price will be set at 10 a.m. on February 6 in Zagreb, the capital of Croatia, the statement said today. The money will be used to pay about 850 million kuna of the country's foreign and domestic debt and one billion kuna in state subsidies for agriculture due by March, the state television Hrvatska Radiotelevizija said on its Web site citing Finance Minister Ivan Suker. The Adriatic Sea nation started selling domestic bonds in 2004 to reduce its external debt, which reached €27.7 billion ($36.1 billion), or around 83% of the estimated GDP, at the end of October. It has since been carried by corporate banks and companies taking overseas loans to satisfy credit demand. Croatia has 10 domestic bonds, six denominated in euros and four in kuna. It also has four Eurobonds. (Bloomberg)