Romania raises EUR 1.25 bln in bond sale at record low yield

Newsroom 19/02/2016 | 11:25

The Ministry of Finance has announced Friday that Romania raised EUR 1.25 billion from two oversubscribed bond auctions on the international markets.

The country got EUR 750 million from selling bonds with a 10-year maturity and another EUR 500 million from bonds that had a 20-year maturity.

The yield for the 10-year bonds was down to 2.55 percent from 2.84 percent in the previous sale in October 2015. Most of the demand came from Romania (23 percent), Great Britain (19 percent) and the US (14 percent)

On the 20-year bonds, the yields went down from 3.93 percent to 3.0 percent. In this tranche, the biggest demand came from German and Austrian investors (22 percent), followed by the UK (18 percent) and US (18 percent).

Fund managers were the biggest investors in the bonds, with a share of around 60 percent. Other buyers included pension funds and insurers.

“Today’s transaction reconfirms the good perception and trust that investors have in the Romanian economy on the back of a volatile market, marked by uncertainties. Due to the significant demand, the bond yields are falling for domestic and international sales. This leads to a reduction of costs linked to the government debt by pushing the maturity of the debt portfolio”, said the minister of finance, Anca Dragu.

The bond sale was managed by Citigroup Inc, HSBC Bank PLC, Raiffeisen Bank International AG and UniCredit SpA.

The sale was part of Romania’s strategy to tap the international markets in order to reduce its refinancing risk.

Ovidiu Posirca

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