Romania cuts coupons on retail government bonds, but adds 10-year maturity for local currency

Romania’s Treasury has cut here and there the coupons attached to the Fidelis government bonds listed at Bucharest Exchange, while adding a new maturity (10 years) for the local currency papers – with a 7.6% coupon, Ziarul Financiar reported. Previously, the longest maturity for the local currency bonds was 6 years, with a 7.5% coupon in May.

While the households showed less enthusiasm with the May Fidelis issue, the volumes collected by the Treasury this month will depend on the investors’ expectations, which are deteriorating. The yield-to-maturity (YTM) for the R2805 bonds with a residual maturity of nearly two years was 7.7% on June 9 – compared to 6.35% coupon attached by the Treasury for the new issues.

Speaking of the foreign currency bonds, preferred by the investors recently after the perceived exchange rate stability deteriorated amid political turmoil, the coupon for the 10-year maturity was cut to 5.8% from 6.25% in May and 6.4% in April. The 3-year bonds will bring 4.0% per year, the same as in May. The coupon for the 5-year maturity also decreased, but by a smaller amount, to 4.85% from 5.00% in May.

The coupon for the 2-year local currency bonds dropped to 6.35% from 6.40% in May, while that for the 4-year maturity also shrank to 6.9% from 7.0%.

(Photo source: Facebook/Bursa de Valori Bucuresti)