Croatia is considering using over-the-counter fx options later this year in what would be its first use of OTC derivatives.Hrvoje Radovanic, assistant finance minister at the Ministry of Finance in Zagreb, told DW the sovereign is planning to use fx options to hedge currency exposure as it becomes more active in the international debt capital markets and grows in sophistication in managing risk. "We are closely monitoring the possibility of using them," he said.
Radovanic continued the sovereign is interested in hedging currency exposure on a planned six-year, JPY125 billion (USD189 million) bond issue it hopes to sell in the summer. The yen-denominated deal is the sovereign's only planned foreign transaction this year, although that is contingent on the successful raising of roughly EUR650 million through domestic debt issues and privatizations.
Moody's Investors Service rates Croatia Baa3 and Standard & Poor's has it at BBB-, each with a stable outlook.
