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April 12, 2021

Romania issues euro-denominated bonds on foreign capital market at interest rate below 3 pct

Romania has issued for the first time euro-denominated bonds on the foreign capital market at an interest rate below 3 percent, the Government’s Press Office reports  on Wednesday.
‘Romania issued bonds with 10 month-maturity, worth 1.5 billion euros, the yield being 0.72 percent lower compared to the 3.701 percent p.a. yield obtained at the last similar euro-denominated issue, for 10 years, launched this April. The investors’ significant appetite for the Romanian state bonds resulted in a rapid subscription, 2.5 times more than the issued volume, and attractive financial conditions, without paying the share premium, at an yield of 2.973 percent p.a.’ the source says.
According to the release, this transaction enables Romania to ‘partially pre-fund the foreign needs for funding for 2015, reinforcing the level of the forex financial reserve.’ ‘The low level of the average cost and the diversified participation of investors reflect Romania’s credibility abroad, a result of the economic policies and the appreciation for the development of the fiscal consolidation and the structural reforms the incumbent Government has adopted over the past two years,’ the release reads.
The source also reveals that the issue was managed by HSBC, Raiffeisen Bank International, Societe Generale and Unicredit Bank.
As for the allocation of the bonds, these were allotted to various investors from Germany/Austria (23 percent), Central and Eastern Europe (12 percent), Italy (10 percent), Romania (10 percent), the U.S. non-residents (9 percent), the rest of Europe (9 percent), Benelux (5 percent) and Asia and the Middle East (4 percent).
As regards the distribution of bonds by categories of investors, the managers of funds won 62 percent, with the rest of the bonds being allotted to insurance, pension funds (21 percent), banks (13 percent), central banks and other types of investors (4 percent).

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