"The state budget for next year includes new economic and fiscal policy measures arising from the environment around us, although tax revenues will not be sufficient to cover all spending," Sven Kirsipuu, deputy secretary general for fiscal policy at the Ministry of Finance, said according to a ministry press release.

According to Kirsipuu, the money being borrowed in the course of the bond issue will provide assurances that the state will also have a sufficient financial buffer to cover its costs next year. Interest in Estonian bonds has been high in the past, however uncertainty in the financial markets must be taken into account right now as well.

"Speaking in our favor are the facts that Estonia has strong fiscal discipline, low debt levels as well as a stable and well-capitalized banking sector, which are reflected in its high credit rating," the deputy secretary general highlighted. "The risks relate to the broader security situation in Europe and the weaknesses commonly found in developed countries, which are considered to be aging societies and declining population numbers."

Following an 18-year gap, Estonia most recently issued long-term bonds, in the amount of €1.5 billion, in 2020 — in order to help cope with the COVID pandemic-related crisis.

The bond issue is being organized by Citibank, Goldman Sachs and Societe Generale. According to the Finance Ministry, the bonds are slated to be listed on the Dublin Stock Exchange in order to make it easier for international investor interest to materialize.

As they are dependent on both market interest rates and investor demand, the bonds' volume and interest rate will be determined at the time of issuing.

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