Bucharest municipality confirms RON 555 mln 7-year bond issue

The Bucharest Stock Exchange system confirmed the RON 555 mln (EUR 111 mln) 7-year bond issued by the Bucharest City Hall for refinancing a loan contracted from the European Bank for Reconstruction and Development (EBRD) in 2020, Profit.ro reported.

The issue, denominated in local currency under the ticker PMB30, had 18 buyers, all of them institutional investors.

In January, the association formed by Banca Comercială Romanian, BRD – Groupe Société Générale and Raiffeisen Bank Romania submitted the only bid in an auction organised by the Bucharest City Hall for financial services necessary for the issuance and sale of bonds due in April 2023.

On April 14, Fitch Ratings revised the municipality's outlook to stable from negative while affirming the long-term foreign- and local-currency Issuer Default Ratings (IDRs) at BBB-. The revision of the outlook follows a recent similar action on the sovereign ratings of Romania.

Fitch has also revised Bucharest's standalone credit profile (SCP) to a from bbb+, reflecting the city's sound operating performance and an ambitious investment plan.

It now reflects Fitch's view of a moderately low risk relative to international peers that the city may see its ability to cover debt service with its operating balance weaken unexpectedly over 2023-2027. This may be due to lower-than-expected revenue, higher-than-expected expenditure, or an unexpected rise in liabilities or debt or debt-service requirements.

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