After it reacted to investors’ risk aversion with higher yields offered under the retail bond issues in April, amid the Middle East war, Romania’s Treasury cut again the coupons attached to the bonds on sale in May. The coupons for the bonds sold under the Fidelis scheme, thus listed at the Bucharest Exchange, dropped by 10-20 basis points in May compared to April, and are below the yield-to-maturity for comparable securities on the secondary market.

Thus, the Treasury sells 2-year RON-denominated bonds with a 6.4% coupon, while the R2805A bonds maturing in May 2028 with a similar two-year residual maturity are traded at a yield-to-maturity of 7.38% (closing price on May 6).

The coupons offered by the Treasury for the local currency bonds in May are 6.4% (from 6.6% in April) for 2-year maturity, 7.0% (from 7.1%) for 6-year maturity, and 7.5% (from 7.6%) for 6-year maturity.

Speaking of the bonds denominated in euros, the Treasury seeks to sell such securities with a  3-year maturity and a 4% coupon (4.25% in April) while the R2904AE bonds with a residual maturity of nearly three years were traded at 5.77% yield-to-maturity at the close of the May 6 trading day.

The coupons for the other euro-denominated bonds are 5.0% (from 5.25%) for 5-year maturity and 6.25% (from 6.4%) for 10-year maturity.

iulian@romania-insider.com

(Photo source: Facebook/Bursa de Valori Bucuresti)