State sold seven times more bonds than the value initially announced

The Ministry of Public Finance (MFP) has attracted RON 735,264,000 via this year’s bond issue through the FIDELIS Program, the Centenary edition, seven times more than initially announced.

In the three weeks of subscription, the demand was very big: 20,185 individuals bought state bonds, 16 times more than last year.

“The large number of investors show the trust Romanians had in this savings product. I am glad that the relationship between the state and the people in whose service we all are can sometimes be that good. The success of this year’s state bonds program for the population is a clear proof of the appetite of Romanians for alternative saving instruments, Romanian PM Dacian Ciolos said.

“It is the greatest success recorded following a bonds issue for the population!There have been around 3 subscriptions per minute, 194 subscriptions per hour. This proves the citizens’ trust in the Romanian state and the fact that there is a need for such a savings instrument on the market. As I stated from the start, the entire demand will be honored,” Anca Dragu, Minister of Public Finance said.

The bonds will be traded on the Bucharest Stock Exchange (BVB) starting August 5. Holders of government bonds can trade them at prices quoted in a transparent manner by the BVB. The price of government bonds on the stock market can fluctuate depending on market conditions. Thus, if the owner chooses to sell the bonds before they reach maturity, there is a possibility that their value can be greater, equal or smaller than the nominal value of RON 100. Bond holders who keep their bonds until they reach maturity will be able to redeem them at the nominal value of RON 100 per title. The MFP announced that bond holders can participate in a lottery after bonds reach maturity. The 100 selected winners will receive RON 1,000 each.

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The Ministry of Public Finance of Romania started issuing government bonds for individuals in 1999, with issues being carried out until 2005. Romanian citizens could buy government bonds with values between RON 100 and 10,000, with maturities between 3 and 12 months. Between 2005 and 2014, the government did not issue any bonds. June 2015 saw the start of the FIDELIS program and the launch of the first issue aimed at the population. The program’s main purpose was to offer individuals an alternative and safe savings product.

The program’s first issue was intermediated by Raiffeisen Bank, BCR and BRD. The total value subscribed to the issue stood at RON 64.99 million and offered a number of 1,236 investors an annual interest of 2.15 percent for a period of two years. The value of a state bond was RON 1,000.

Georgeta Gheorghe