Romanian individual investors buy EUR 550 mln worth of govt. debt

Romanian individual investors placed orders to buy some RON 2.7 billion (EUR 550 mln) worth of government debt denominated in local and foreign currency in the latest issue carried by the Treasury on the Bucharest Stock Exchange in November, Ziarul Financiar reported.

The volume is some 30% over the similar Fidelis issue in July-August, when the coupons attached were slightly higher.

The new Fidelis issue ended on November 27, and the papers will later be listed on the Bucharest Stock Exchange (BVB), where individual investors will be able to trade them.

The maturities for the two issues denominated in local currency are one and three years.

The bonds denominated in foreign currency have a maturity of five years.

The coupons attached to the local currency bonds are placed on a yield curve 25bp below that implied by the similar issues launched in July-August.

Thus, the government is now paying 3.5% for one-year maturity and 4% (per year) for the three years maturity — while it paid 4% for two years and 4.5% for four years in July-August.

The households placed orders for RON 629 mln of one-year RON denominated bonds, RON 668 mln worth of three-year RON denominated bonds, and EUR 289 mln (RON 1.4 bln) five-year EUR denominated bonds.

In July-August, the Government raised RON 1.22 bln (EUR 250 mln) and EUR 168 mln through the Fidelis program.

In addition to this program carried out through the Bucharest Stock Exchange, the Treasury also sells bonds to households through its own network and the Romanian Post units in the so-called Tezaur program.

The bonds sold through the Tezaur program offer similar conditions as those sold through Fidelis, but are not tradable. Individuals pay no taxes for the gains from state bonds.

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