The Ministry of Public Finance (MFP) announced on Wednesday that Romania had attracted 3.3 billion euros from external capital markets at attractive costs in the context of the spread of the COVID-19 pandemic, and the funds related to this transaction entered the Treasury’s accounts on 26 May.
The total value of the issue is 3.3 billion euros, the level of final subscription being more than three times higher, with the participation of more than 585 investors.
The issue was carried out in two tranches, of which 1.3 billion euros with a maturity of 5 years, with a yield of 2.793pct and an interest rate of 2.750pct per year and two billion euros with a maturity of 10 years, with a yield of 3.624pct and an interest rate of 3.624pct per year.
As regards the geographical distribution of investors, for the five-year long maturity (with maturity of 26 February 2026), this was the following: the United Kingdom and Ireland 22pct, the USA 14pct, Germany and Austria 15pct, Romania 6pct, EEC 6pct, Switzerland 5pct, Italy 7pct, France 4pct, the rest of Europe 16pct and Asia 5pct.
At the same time, for the maturity of 10 years, the geographical distribution of investors included: the United Kingdom and Ireland – by 35pct, the USA 23pct, Germany and Austria 9pct, Romania 8pct, EEC (excluding Romania) 6pct, Switzerland 5pct, Italy 2pct, France 2pct, the rest of Europe 7pct and Asia 3pct.
The transaction was brokered by BNP Paribas, Erste Group Bank AG, ING Bank N.V., J.P. Morgan Securities Plc., Raiffeisen Bank International AG and Unicredit Bank AG, while Filip & Company Law Firm provided assistance, together with Linklaters Law Firm.
FinMinCitu: The 3.3 billion euro loan gives us comfort of financing all expenditure foreseen in budget
We have gone out on the international markets and the interest in Romania has been almost 14 billion euros, of which we have chosen to borrow 3.3 billion euros, the Public Finance Minister Florin Citu said after the government meeting on Wednesday.
He specified that the loan offered the possibility of financing expenditure from the budget without any problems.
Budgetary effect of fiscal measures is almost 1.5% of GDP
The Minister of Finance, Florin Citu, declared on Wednesday that the budgetary effect of the fiscal measures represents, in just two and a half months, almost 1.5% of the GDP, an enormous effort to support the Romanian economic environment during this period.
“There were three major categories of fiscal measures that this Government has taken. There were legislative fiscal measures, adopted during the state of emergency and 30 days after its cessation, we had other fiscal measures for the period of the state of emergency and we have fiscal measures that remain in place after the state of emergency,” the Finance minister said.
He said that there were real measures that helped the business a lot and that they represent “an oxygen bubble” for companies, the equivalent to 1.5% of GDP”.
Among the measures adopted are the suspension of enforced executions, extensions of deadlines for the declaration and payment of the obligations to the state, extending the VAT refund with subsequent control or bonuses for taxpayers.