RO Govt. prepares ground for new Eurobond issues worth EUR 10 bln by 2022

Romania’s Finance Ministry drafted and promoted for endorsement a draft order aimed at lifting by EUR 10 billion (to EUR 41 bln) the cap set for the country’s medium term notes (MTN) program used for issuing Eurobonds, Agerpresreported.

The Government can raise only EUR 0.365 bln extra under the existing cap and expanding the cap by EUR 10 bln would allow Romania to continue borrowing from international markets in 2020-2022.

In the current situation, more room for new Eurobond issues is made available only when the country repays bonds issued in the past, and the Government might need to issue bonds, depending on the situation on the market, at an earlier moment, finance minister Florin Citu explained.

Romania’s Government has set a 3.6% of GDP (some EUR 7.5 bln) budget deficit target for this year and the country typically finances half of its deficit from foreign markets.

However, the actual deficit might exceed the target and independent analysts expect public gaps as wide as 5% of GDP.

During 2020-2022, Eurobonds worth EUR 3.84 bln (EUR 2 bln in September 2020 and USD 2.01 bln, equivalent to EUR 1.84 bln in February 2022) will reach maturity.

In related news, Romania's total external debt increased by EUR 3.9 billion in January, up to EUR 109.9 billion, as the Finance Ministry borrowed EUR 3 billion from the foreign markets to cover the need for financing of the budget. Of the total external debt, the public debt represents EUR 43.1 billion, up by 9.3% compared to the level registered at the end of 2019.

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