CROATIA'S GOVT BOND SALE SUCCESSFULLY COMPLETED - SAYS SKEGRO

ZAGREB, Feb 24 (Hina) - Croatian Finance Minister Borislav Skegro on Wednesday told reporters in Zagreb Croatia had successfully sold all government bonds denominated in euro for EUR300 million. The bonds were sold for a seven-year period at an interest rate of 7.735 percent. The interest will be paid from the state budget every year, while the entire debt will be paid out in 2006, said Skegro who on Tuesday completed all activities in placing and selling the bonds in London. He expressed satisfaction with the just completed transactions, and pointed out the EUR300 million sum would settle all of Croatia's international financial obligations this year. The sum will contribute to economic and currency rate stability, Skegro said, adding EUR300 million was 13 percent of the Croatian National Bank's present foreign currency reserves. Speaking about he completed government bond promotion in seven European cities, the Finance Minister said the principal point in presenting Croatian economy was emphasis on fiscal flexibility, i.e. the capability of Croatian economy to deal with market quakes caused by the Asian and Russian crises. Skegro said it had become clear during the tour that the interest in Croatian government bonds was far beyond Croatia's expectations. He denied reports that Croatia had had a poor bond sale due to a lower credit rating, and ascribed such allegations to journalistic ignorance. Skegro confirmed Croatia still enjoys the BBB investment credit rating, and not a speculative one as had been reported. Reports that Croatia is being treated like Mexico or Argentina are incorrect, given that these two countries are paying a far higher interest rate on their bonds than Croatia, he explained. Asked about kuna's currency, Skegro said it would stabilise, without further slipping. (hina) ha mm