Finance Ministry to borrow RON 5.45 bln and EUR 500 M from banks in February

The Public Finance Ministry (MFP) plans to borrow RON 5.45 bln from commercial banks in February, of which RON 5 bln through seven tenders for treasury certificates and government bonds, and RON 450 M through supplementary tenders for non-competitive offers related to the bond tenders. Also in February, the MFP wants to borrow another EUR 500 M by issuing five-year EUR-denominated government bonds. The tender will take place on February 24.

The sums will be used to refinance the public debt and the budget deficit.

In 2016, the total volume of loans that MFP will launch on the domestic market by issuing government bonds is determined by the projected level of the budget deficit (2.8 per cent of GDP or around RON 21 bln), which will be financed from the domestic market (50 per cent) and the external market (50 per cent), also by the level of the refinancing of RON- and EUR-denominated government bonds scheduled to come to maturity in 2016, totalling around RON 38 bln (RON 31 bln for RON-denominated bonds and RON 7 bln for EUR-denominated bonds).

Likewise, the MFP is considering borrowing EUR 4.5 bln on external markets, depending on the evolutions and opportunities offered by these markets, bearing in mind the level of reimbursement related to the issuance of Eurobonds falling due in June 2016 on external markets, worth EUR 1.5 bln, and the need to consolidate the financial reserve at the State Treasury’s disposal.

Thus, financing from external sources will be done through the Medium Term Notes programme, through the issuance of Eurobonds worth around EUR 3 bln and drawings from loans contracted from international financial institutions, worth around EUR 1.5 bln.

MFP is also considering issuing on the domestic market a volume of government bonds worth RON 48-50 bln, of which RON 14-15 bln in treasury certificates and RON 34-35 bln in benchmark bonds.

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