Romanian FinMin happy with outcome of EUR 3.3 bln Eurobonds

Romania has obtained the lowest financing costs ever for the Eurobonds issued this year (EUR 6.3 bln in four tranches).

The average financing cost is some 50bp (0.5pp) lower than initially planned, finance minister Forin Citu commented on May 27, as he announced the detailed outcome of the EUR 3.3 bln Eurobond issues launched on May 19 and disbursed on May 26.

"The success of this transaction demonstrates once again the confidence that Romania enjoys among the international community of investors, even during this challenging period, generated by the COVID-19 pandemic. The Government remains fully committed to fighting against the [effects of the] epidemic, and will use the money raised through Eurobonds to cover the growing financing needs resulting from the budget deficit and the volume of public debt refinancing," Citu added, quoted by Agerpres.

Romania raised more than planned and paid a lower yield than expected under the indicative terms of the Eurobonds launched on May 19. For the five-year tranche (EUR 1.3 bln), the yield was 2.793% and the coupon - 2.75% (305bp over mid-swap). For the 10-year installment (EUR 2 bln), both the yield and the coupon were 3.624% (375bp over mid-swap).

The spreads initially set by the Treasury were 355bp over mid-swap for the 5-year Eurobonds and 425bp over mid-swap for the 10-year titles. However, the financing costs were significantly higher in May compared to January, when Romania carried out its first Eurobond issue of the year, even corrected for maturity.

In January, Romania paid only 180bp over mid-swap for 12-year Eurobonds and 285bp over mid-swap for 30-year titles.

(Photo: Pixabay)