Andorra Executes First Public Debt Buyback, Saving €3.2M

The Andorran government has executed its first partial public debt buyback, repurchasing €16.4 million in bonds maturing on 6 May 2031 for €14.94 million, which generates total savings of around €3.2 million.

Government spokesperson Guillem Casal explained that the lower purchase price resulted from elevated current interest rates compared to issuance levels, reducing the bonds' market value before maturity. Funded by surplus treasury funds from the 2025 budget year, the operation cuts annual interest expenses by about €326,000 until 2031—totalling nearly €1.6 million—and delivers an additional €1.6 million in savings at redemption by buying below nominal value. Casal emphasised that it achieves a genuine drop in public debt, bringing levels under 30% of GDP a year and a half early, ahead of the current legislature's end. He described it as the Finance Ministry's inaugural sovereign repurchase in its public treasury role, advancing financial management modernisation. Officials indicated potential for a repeat next year if market conditions and liquidity permit.

In a related move, the government on Wednesday published a tender in the Official Bulletin of the Principality for international advisory services to handle the refinancing of €500 million in bonds due 23 February 2027. The contract, valued at €236,034.11 with a total bidding budget of €246,655.65 including IGI tax, will assess whether to launch a new international debt issuance programme or update the existing one from April 2021. That programme, capped at €1.2 billion to refinance 2021-2022 debt and enable authorised new borrowing, has facilitated issuances including €500 million due May 2031 (partially repurchased), €500 million due February 2027, and €175 million due October 2041. Specifications mandate Luxembourg law for bonds and agreements, retention of the €1.2 billion medium-term note limit aligned with debt authorisations, and continuity of current programme terms.