Romania issues EUR 5 bln FX bonds to finance excess public deficit

While preparing the first Samurai bonds in the past decade, Romania tapped on September 19 the international bond market by raising the equivalent of EUR 5 billion with three issues denominated in euros (two issues) and US dollars, according to Ziarul Financiar.

They account for a significant part of the RON 37 bln (EUR 7.5 bln) supplementary public deficit financing prompted by the 1.9%-of-GDP public fiscal deficit slippage from under 5% of GDP to 6.95% of GDP this year.

In the first issue, EUR 2.25 bln denominated in euros with a maturity of 7 years was made at an interest rate of mid-swap plus 2.75 percentage points.

In the second issue, denominated in euros, with a maturity of 20 years, Romania borrowed EUR 750 mln at mid-swap plus 3.5 percentage points.

In the issue denominated in US dollars, Romania borrowed USD 2.10 bln at the interest rate of 10-year US government bonds plus 2.1 percentage points.

Investors' interest was roughly three times larger than the final size of each of the three issues: EUR 7.2 bln for 7-year bonds denominated in euros, USD 8.5 bln for 10-year US-denominated bonds, and EUR 2.3 bln for 20-year bonds denominated in euros.

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