Romania’s Treasury cuts coupons in second government bond issue under Fidelis scheme

The coupons attached by the Romanian Treasury to the bonds on sale under the second issue of the Fidelis scheme (bonds listed at the Bucharest Exchange) were cut for both local currency and euro-denominated papers. This comes after the record demand registered in the first issue this year in February when the Treasury raised over RON 4.3 billion (nearly EUR 0.9 billion).

The coupon for the bonds denominated in local currency will decrease by 0.15 percentage points for each maturity to 6.8% for the one-year bonds, 7.5% for three years, and 7.8% for five years.

The coupons are larger than the average yields paid on the interbank market, and the interest is not subject to income taxation for retail investors.

The Treasury paid an average yield of 6.64% in an 11-month bill issue on February 24.

The most recent issue comparable with the three-year maturity was a 38-month issue on February 10, where the average yield was 7.23%. In a 66-month (5 years plus) issue on February 12, the Treasury paid an average yield of 7.39%.

The coupon for the bonds denominated in euros will decrease by 0.25 percentage points to 3.75% for one-year papers and 6% for seven-year papers.

The nominal value of a Fidelis government bond is RON 100 for the issue in lei and EUR 100 for the issue in euros, and the minimum subscription threshold is RON 5,000 and EUR 1,000, respectively.

(Photo source: Facebook/Bursa de ValoriBucurești)