Romania raises EUR 3 bln in 12-year and 30-year Eurobonds at lower costs

Romania’s Finance Ministry has borrowed EUR 3 billion in its first bond issues on foreign markets in 2020.

Romania issued two tranches, one with a maturity of 12 years and the other one for 30 years. According to Ziarul Financiar, the investors placed orders for EUR 12 bln worth of Romanian debt, more than four times as much as the Romanian state decided to borrow.

On the 12-year tranche, the yield was set at 180 basis points (bp) above the mid-swap, respectively 2.04% per year, while on the 30-year tranche, the mid-swap level plus 285 bp resulted in an interest rate of 3.41% per annum.

Romania issued Eurobonds twice last year and raised EUR 3 bln in March and EUR 2 bln in July. The 30-year bond issued in March 2019, Romania’s first for such a long maturity, was priced at 365bp above mid-swap (4.65%). The bond was then tapped in July when the yield was 3.4%. The 12-year Eurobond issued in July was priced at 185bp above mid-swap (2.125% at that time).

Romania has to borrow some RON 86.9 billion (EUR 18.1 bln) this year to finance its 3.6% of GDP budget deficit and refinance the debt that reaches maturity, the Finance Ministry announced. From the total estimated amount, the ministry wants to attract about EUR 6 bln (RON 28.8 bln) from foreign financial markets by issuing Eurobonds, early repurchase operations and partial exchange of existing Eurobonds series, private placements, as well as by borrowing from international financial institutions.

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