Romanian bank BCR lists 2028 bonds with 9.56% coupon

BCR bank group listed at the Bucharest Stock Exchange (BVB) on October 12 a new issue of corporate bonds (BCR28C), worth RON 334 mln (EUR 66 mln), the third bond listed by BCR at BVB this year and the eighth bond overall.

BCR issued and sold to 10 bondholders a number of 668 corporate bonds with a nominal value of RON 500,000, maturity date on October 6, 2028.

Following the book-building process, the value of the issue was increased from a minimum target of RON 200 mln to RON 334 mln, while the yield is 110bp above the yield of government securities with the same maturity.

The total value of BCR bonds available for trading at BVB is over RON 4 bln.

Speaking of trading, it is actually very scarce, if any, for such corporate bonds with very large face value issued for MREL requirements purposes mostly.

For instance, the bank’s BCR 26 bonds issued in December 2019 with a 5.35% coupon maturing in 2026 were interestingly valued on October 13 - based on the last trading on May 19, 2021 - some 7.9% above par, hence at a yield of 3.29%, at a time when the yields for such maturities should be close to 10% (in line with the coupon of the newly listed bonds).

Most of the bonds issued for MREL purposes with a large face value (RON 500,000 in the case of BCR28C) are never traded therefore, they are valued at face value hence at a yield in line with the coupon attached.

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