GOVERNMENT ON BONDS, CONSTRUCTION OF SCHOOLS, HOSPITALS

ZAGREB, May 22 (Hina) - The Croatian government on Thursday decided to issue state bonds worth one billion kuna (approximately 133 million euros), which would be put on the domestic market. #L# This is the first time the government has issued long-term, i.e. five-year bonds, denominated in the national currency kuna, as an instrument for investments by institutional investors as well as citizens, Finance Minister Mato Crkvenac said. There is also a great interest in this kind of bonds among investors and citizens, the minister said adding that the latter category had so far expressed interest in buying almost one million kuna in bonds. On 28 May, the bonds, with the fixed interest rate of 6.125 percent, will be listed in the first quotation of the Zagreb Stock Exchange. The arrangers of the issuing are Rijecka and Splitska banks. On Thursday the government also gave the green light to a project to build and reconstruct 140 schools in the next three years. The project is worth 800.4 million kuna (approximately 106 million euros). A half of this amount will be covered by a loan to be granted by the Council of Europe's Development Bank. The Ivica Racan Cabinet commended the Croatian Bank for Development and Reconstruction (HBOR), which in the past decade approved loans worth 32.5 billion euros. This financial institution wrapped up last year with a positive result of 72.5 million kuna, the HBOR managing board's chairman, Anton Kovacev, said submitting a report to the government. The Cabinet okayed a bill on the set-up of Dubrovnik University, which will be the sixth university in the country. The government also decided on Croatia's participation in the EXPO 2005 event in Aichi, Japan. The foreign ministry should ensure initial funds of one million kuna for this purpose. A plan for the development of hospitals until 2010, which will cost seven billion kuna, was also endorsed at the session. (1EUR = 7.51 kuna) (hina) ms sb