Romania drew two billion euros from the external markets, on Thursday, in an issue of Eurobonds released in two tranches, with maturities of 12 and 20 years respectively and the smallest credit risk margins for this type of maturities, the Minister of Finance informed in a release.
“The Ministry of Public Finance borrowed two billion euros from the international financial markets on February 1 2018, in an issue of euro-denominated Eurobonds, in two tranches, among which 750 million euros had a 12-year maturity with a 2.50% coupon and 1.25 billion euros had a 20-year maturity, with a coupon of 3.375%. The issued enjoyed a very high interest from the investor, as it was subscribed twice,” specified the institution.
According to the same source, the transaction is part of an external financing plan for 2018, by this issue Romania covering an important part of the need for financing from the external markets for this year, strengthening thus at the same time its financial reserve in foreign currency at the disposal of the State Treasury. Moreover by the maturities it chose, Romania is attempting to reach the objective of expanding the maturity curve in euro.
The total cumulated demand exceeded 5.3 billion euro from approximately 300 subscription notes from the investors, and the final request at the level of the established price exceeded four billion euros (1.7 billion euros for the 12-year tranched and 2.4 billion for the 20-year tranche). The investment basis of the transaction was diversified, both in geographic terms and by types of investors for both tranches, with a recorded participation of 28 countries for each tranche.
The issue was brokered by Barclays Bank PLC, Erste Group Bank AG, Societe Generale, Unicredit and ING Bank NV.
The two tranches were issued with the smallest margins over the mid-swap reference rates for the issued maturities. Thus, for the 12-year maturity, the achieved yield accounted for 2.585% and for the 20-year issue the smallest cost had a yield of 3.45%, down from the issue with the same maturity from October 2015, with an yield of 3.93% (reopened later in February 2016 with an yield of 3.90% and in April 2017 with an yield of 3.55%).