Romanian state runs new bond issue on Bucharest Stock Exchange

Romania’s Finance Ministry opened on November 18 a new state bond issue on the Bucharest Stock Exchange (BVB) under the Fidelis program. The offer runs until December 10.

Investors can choose between three bonds two of which are in local currency (RON) while the third one is in euro.

The bonds in local currency have maturities of one year and three years and offer a yearly coupon of 4% (the one-year bond), respectively 4.6% (the three-year one). The nominal value of the bonds is RON 100 and the minimum subscription is RON 5,000 (about EUR 1,000). For comparison, in September, the Finance Ministry was paying 3.25% per year for one-year bonds and 3.75% for three-year titles.

The bonds in euro have a maturity of five years and offer a yearly interest of 1.8%, up from 1.6% in September. The minimum subscription in this case is also EUR 1,000.

While significantly higher than in the previous similar issue carried out in September, the annual interest rates offered by these new bonds are well below the most recent annual inflation rates announced for October – 7.9% in Romania and 4.1% in the Eurozone, but the is expected to ease next year.

The new edition of the Fidelis bond program is managed by BT Capital Partners as Lead Manager and BCR and BRD as intermediaries, but investors can participate through most of the local brokerage firms.

This is the sixth Fidelis issue since July 2020. Through the first five offers, the Finance Ministry attracted from the retail investors almost RON 8 bln (EUR 1.6 bln).

(Photo source: BVB)