RO Treasury raises more money than planned with bond issue

Romania’s Treasury raised significantly more money than planned with the reopening of a bond that matures September 2023, on Monday, November 25, Ziarul Financiar reported.

Moreover, the Treasury accepted a yield superior to that seen in the last similar move, a scenario that is likely to repeat in the following months as the Government has to finance a budget deficit that will eventually be higher by 1.3% to 1.5% of GDP than planned.

The Treasury raised RON 1.05 billion (EUR 220 mln) by selling bonds with a residual maturity of 46 months, more than double versus RON 400 million (EUR 83.7 mln) planned.

The average yield was 3.92%, up from 3.86% on November 13 when the borrowing cost was already pushed up by the comments of new finance minister Florin Citu about the hole in the state budget.

In mid-September, the Treasury was paying only 3.74% in another re-opening of the same bond maturing September 2023.

The latest auction on November 25 was heavily oversubscribed, with the banks placing orders for RON 1.86 bln worth of bonds, which shows massive liquidity available on the interbank market.

(Photo: C Sarayut Thaneerat/ Dreamstime)