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05-Feb-2018
Government goes on Eurobond market and attracts over EUR 3 billion. Complicated yields
CursDeGuvernare.ro
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Government goes on Eurobond market and attracts over EUR 3 billion. Complicated yields
de Adrian N Ionescu , 5.2.2018 The Ministry of Finance is trying to take advantage of the
still favourable conditions for emerging government securities and goes on the Eurobonds
market with two issues, one with a maturity of 12 years and the second of 20 years.
Subscriptions started at EUR 3 billion and a yield of 150 basis points above the mid-swap
rate (spread) for the 12-year issue and from 210 basis points above the mid-swap for the
20-year issue, respectively, according to Capital Global. Bankers expect that, once the
threshold of RON 3 billion for subscriptions is exceeded, there will also be a decrease in the
spread, according to the quoted source. In the meanwhile, subscriptions would have
exceeded EUR 5 billion, according to other unconfirmed sources. The Romanian
Government will decide what offers it accepts at the end of the subscriptions, according to
the quoted source but the Ministry of Finance’s plans envisage a volume of only EUR 4.5-5
billion that would be attracted from the foreign markets this year and RON 48 – 50 billion
from the domestic market. The mid-swap rate is a benchmark like the interest rate for
German bonds on the same period (in the case of bonds issued by Romania and other
countries in the region), currently of 1.24% for the 12-year bonds and 1.54% for 20-year
bonds. Global capital sources believe that Romania’s offer is a rare opportunity for investors
to buy government bonds from Central and Eastern Europe at spreads higher than 1
percentage point. Barclays Bank Plc, Erste Group Bank AG, ING Groep NV, Societe
Generale SA and UniCredit Bank AG are the main intermediaries of Eurobond issues.
Abonai-v la Newsletter! Email Address : Romania’s ratings are Baa3, BBB- and BBB-,
issued by the three major rating agencies.
On Thursday, the Ministry of Public Finance also placed a bond issue of RON 400 million,
with a 3-year maturity and an annual interest rate of 3.76%. Mergei în homepage › Etichete:
eurobond, financing, government bonds, Ministry of Public Finance, Romanian Government
Publicat la data de 5.2.2018 Citii i: