Latvia: bonds

In Latvia the fixed income market is small by international standards, yet it has developed a versatile legislative framework and adequate institutions. The Latvian fixed income market is formed by the governmental bonds, mortgage bonds, and corporate bonds. In 2008 these segments took s 73 %, 16 %, and 11 %, respectively. Government bonds strongly dominate the Latvian capital market in the aspect of both amount and liquidity.

Development of Latvia's government bond market started in December 1993. Since 1999, government bonds have been actively traded at the Riga Stock Exchange. The attractiveness of Latvian government bonds is determined by the good country rating and the fact that the volume of the non-government bonds is not large.

One of the basic features of Latvia's capital market is the preference that non-financial enterprises have for banks' credit over the issuance of bonds. Bond yields are usually higher than credit interest rates, therefore issue of bonds is not attractive to companies. Banks are the most active issuers in the corporate bond segment.

Outstanding bond issues

Сurrency Outstanding bond issues Cumulative volume
sovereign
EUR 18 6 269 874 158
USD 2 1 750 000 000
corporate
EUR 51 801 511 980
USD 32 977 648 000
SEK 1 375 000 000

Sovereign rating

Rating AgencyRatingRating scaleDate
RIA Rating *** Sovereign ratings ***
Dagong Credit *** International scale rating (foreign curr.) ***
Dagong Credit *** International scale rating (local curr.) ***
Organisation for Economic Co-operation and Development (OECD) *** Country Risk Classifications ***
Moody's Investors Service *** LT- foreign currency ***
Moody's Investors Service *** LT- local currency ***
S&P Global Ratings *** Foreign Currency LT ***
S&P Global Ratings *** Local Currency LT ***
Fitch Ratings *** LT Int. Scale (foreign curr.) ***
Fitch Ratings *** LT Int. Scale (local curr.) ***
Rating Agency RAEX (Expert RA) *** Foriegn curr. scale ***
Rating Agency RAEX (Expert RA) *** Local curr. scale ***
National Rating Agency *** Global scale ***
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Latest bond issues

issue ISIN coupon volume end of placement maturity date
Latvia, 2.25% 15feb2047, EUR - International bonds XS1566190945 2.25% 500 000 000  EUR 02/09/2017 02/15/2047
Latvia, 0.375% 7oct2026, EUR - International bonds XS1501554874 0.375% 800 000 000  EUR 02/09/2017 10/07/2026
4Finance, 11.25% 23may2021, EUR - International bonds XS1417876163 11.25% 150 000 000  EUR 11/21/2016 05/23/2021
Latvia, 1.375% 16may2036, EUR - International bonds XS1409726731 1.375% 650 000 000  EUR 05/10/2016 05/16/2036
Latvia, 0.5% 15dec2020, EUR - International bonds XS1333704713 0.5% 550 000 000  EUR 11/30/2015 12/15/2020
Latvia, 1.375% 23sep2025, EUR - International bonds XS1295778275 1.375% 500 000 000  EUR 09/16/2015 09/23/2025
4Finance, 11.75% 27mar2018, SEK - International bonds SE0006594412 11.75% 375 000 000  SEK 09/15/2015 03/27/2018
4Finance, 11.75% 14aug2019, USD - International bonds XS1092320099 11.75% 200 000 000  USD 08/08/2014 08/14/2019
Latvia, 2.875% 30apr2024, EUR - International bonds XS1063399536 2.875% 1 000 000 000  EUR 04/24/2014 04/30/2024
Latvia, 2.63% 21jan2021, EUR - International bonds XS1017763100 2.625% 1 000 000 000  EUR 01/14/2014 01/21/2021

World Bond Market Indicators

Monthly indices

Type Feb 2017 Jan 2017 Dec 2016 Nov 2016 Oct 2016 Sep 2016 Aug 2016
EU Long-term interest rates
Latvia, % 0.99 0.89 0.90 0.56 0.19 0.10 0.12
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World Bond market statistics

Quarterly indices

Type IV 2016 III 2016 II 2016 I 2016 IV 2015 III 2015 II 2015
BIS volume of international-bond market of emerging countries
Latvian international bonds, USD bln 9.100 8.000 8.000 7.300 7.100 6.600 6.000
BIS net issues of international-bond market of emerging countries
International-bond net issue of Latvia, USD bln 1.500   0.800 0.000 0.600 0.600 0.000

Emerging Markets International Bonds

Monthly indices

Type Feb 2017 Jan 2017 Dec 2016 Nov 2016 Oct 2016 Sep 2016 Aug 2016
Eastern Europe International Bonds Markets
International bonds of Latvia, USD bln 7.957 8.370 8.237 8.268 8.403 8.642 8.602
Sovereign international bonds of Latvia, USD bln 7.472 7.880 7.753 7.784 7.966 7.357 7.324
Corporate international bonds of Latvia, USD bln 0.485 0.490 0.484 0.484 0.437 1.285 1.278
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Credit Risk Indicators

Daily indices

Type: 01/06/2016 01/05/2016 01/04/2016 12/31/2015 12/30/2015 12/29/2015 12/28/2015
CDS Emerging markets (sov.) 
CDS 5Y Latvia mid * * * * * * *
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Stock market (World)

Daily indices

Type: 03/27/2017 03/24/2017 03/23/2017 03/22/2017 03/21/2017 03/20/2017 03/17/2017
Stock market (Eastern Europe)
OMX Riga (Latvia)  770.47 771.49 770.28 761.67 772.15 771.97 777.19
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Bonds prices

issue volume maturity date bid prices ask prices
date bid price yield date ask price yield
Latvia, 0.5% 15dec2020, EUR   EUR 12/15/2020 05/18/2016 *** *.** 05/18/2016 ***.**** *.**
Latvia, 1.375% 16may2036, EUR   EUR 05/16/2036 05/18/2016 **.* *.** 05/18/2016 **.*** *.**
Latvia, 1.375% 23sep2025, EUR   EUR 09/23/2025 05/18/2016 ***.** *.** 05/18/2016 ***.* *.**
Latvia, 2.63% 21jan2021, EUR   EUR 01/21/2021 05/18/2016 ***.** *.** 05/18/2016 ***.**** *.**
Latvia, 2.750% 12jan2020, USD   USD 01/12/2020 05/18/2016 ***.*** *.** 05/18/2016 ***.** *.**
Latvia, 2.875% 30apr2024, EUR   EUR 04/30/2024 05/18/2016 ***.*** *.** 05/18/2016 ***.* *.**
Latvia, 5.250% 16jun2021, USD   USD 06/16/2021 05/18/2016 ***.* *.** 05/18/2016 ***.** *.**
Latvia, 5.250% 22feb2017, USD   USD 02/22/2017 05/18/2016 ***.** *.** 05/18/2016 ***.** *.**
Latvia, 5.50% 5mar2018, EUR   EUR 03/05/2018 05/18/2016 ***.*** -*.** 05/18/2016 ***.*** -*.**
4Finance, 11.75% 27mar2018, SEK   SEK 03/27/2018 05/18/2016 *** **.** 05/18/2016 *** **.*
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