The ministry stated Wednesday that: "Investor interest in the additional issue of government bonds yesterday turned out to be very high. 176 investors wished to subscribe for bonds, to a total of over four billion euros."

The ministry added that the market situation for Estonian government bonds has improved since last autumn, as illustrated by the fact that the latest issue has seen more than an eight-fold over-subscription – a record level in fact.

The lower interest rate derives from lower margins since last October, even as the reference interest rate against which bonds are priced is unchanged, the ministry says.

The 10-year bond issue totaling €1 billion last October saw a 4 percent interest rate; the €1.5 billion issue two years earlier had a 0.125 percent coupon interest rate at a time when bond coupon rates worldwide were hitting all-time lows in many cases.

The Estonian government borrowing arising from the bond sale is to go towards replenishing state liquidity reserves and to covering the general state budget deficit for the second half of 2023, the ministry says.

The state announced in April that it was to borrow €1.3 million for this year.

The bond issue was organized by Barclays, Erste Group and Goldman Sachs Bank Europe.

Government bonds, in the U.K. known as gilts, are issued by states as a way of bolstering public spending. They usually pay coupon interest rate payments, on top of the face value on maturation.

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