Demand for new Estonian government bonds totalled EUR 821mn, which was four times more than the EUR 200mn offered, the Ministry of Finance announced, ERR reports.
Altogether 28 professional investors and 7,304 retail investors participated in the public bond offering. Retail investors subscribed to bonds worth EUR 29mn and will receive 100% of the amount subscribed to. Estonian professional investors will receive 26% and international investors 13% on average.
Trading in Estonian bonds will begin on the Nasdaq Tallinn stock exchange on 17 September 2024. The bonds will mature on 16 September 2026, yielding a fixed annual interest rate of 3.3%.
Does oversubscription mean that the Estonian government can choose which bonds to emit to whom?
What effects does that have for Estonia?
I don’t know exactly how Estonia handles this in detail, but it means that each buyer only gets a fraction of what they want to buy. Usually large funds get a bit more than retail customers as it is the case also here according to the numbers.
It means that Estonia is considered a trustworthy creditor.
It means that the finance minister is handing out money to investors. If a bond issue is that oversubscribed the risk/reward is wrong. I this case the rate is too high. Inflation is at about 2% in the Eurozone and Estonia has very little debt, due to having a debt cut due to its independence
It suggests their interests where too high though.