Serbia and its largest telecommunications company have secured substantial funding through international bond markets in 2026, as rising global interest rates make borrowing increasingly expensive for governments and businesses.
The Serbian state completed a multi-currency, three-tranche eurobond transaction worth approximately EUR 3 billion, allocating part of the proceeds to repay obligations falling due in 2027. Telekom Srbija separately raised around EUR 1.95 billion through an international multi-tranche bond issuance.
The transactions demonstrate continued access to international capital markets, although the financing environment has become considerably more challenging.
Global Bond Yields Increase Financing Costs
According to MAT’s analysis of global bond markets, benchmark yields have climbed to levels not recorded for approximately two decades. The US 10-year Treasury yield reached 5.34% in early October, while the average 10-year benchmark yield across the G7 economies reached 4%.
Governments, technology companies and industrial businesses are competing for the same pool of available savings, increasing the cost of financing across different sectors.
For Serbia, the shift does not immediately indicate a funding crisis, but it raises the cost threshold for new borrowing and investment. Infrastructure projects, including roads and railways, energy developments, corporate acquisitions and debt refinancing must now be assessed against higher financing expenses. Projects structured around borrowing costs of approximately 3% may become significantly less attractive when long-term interest rates rise by several percentage points. Currency exposure also becomes more important when financing is obtained across multiple international markets.
External Liabilities Reflect Greater Reliance on Bonds
Serbia’s external financing structure has also changed. Portfolio liabilities increased sharply in the first half of 2026, following the issuance of debt securities abroad by the state and companies.
This represents a different financing pattern from one based primarily on bank lending or foreign direct investment. International bond markets can provide substantial funding volumes and greater flexibility, but access and borrowing conditions are more sensitive to investor sentiment and the availability of favourable refinancing windows.
Debt Management and Project Returns Become More Important
Managing the increased exposure to bond financing involves extending debt maturities, avoiding concentrations of repayment obligations, maintaining reserves and directing borrowed funds towards projects capable of expanding future productive capacity.
Serbia’s recent sovereign and corporate transactions demonstrate its ability to raise capital internationally. However, higher borrowing costs make the financial returns generated by debt-funded investments increasingly important, reducing the scope for projects that cannot produce sufficient economic value to justify their financing expenses.
