Romania raises EUR2bn from external market with Eurobond issues

The finance ministry issued 12-year and 30-year Eurobonds on international markets raising EUR2bn, according to Bloomberg. That follows EUR3bn borrowing at end-March, which came from 7-year, 15-year and 30-year Eurobonds, the biggest amount ever raised in one tapping. Therefore, the EUR4.25bn external borrowing target was exceeded. That was not surprising though, as the finance minister recently said that if market conditions would allow, the treasury might use the next year’s financing plan and raise above schedule. Demand for Romania’s bonds was comfortable, with total bids reaching EUR5.7bn. Thus, the state raised EUR1.4bn with the 12-year Eurobond and EUR 0.6bn with the 30-year one.

The finance ministry has not yet updated its public debt strategy, even if that should have been done at the beginning of the year. The last year version estimated EUR4bn Eurobond issues, while domestic placements were estimated to raise RON48-52bn and EUR0.5bn in 2019. Yet, Finance Minister Eugen Teodorovici announced bigger amounts, namely RON49-50bn from the domestic market and EUR4.25bn from the international market. He even extended the MTN program by EUR4bn, clearly indicating he has big borrowing intentions this year. The Treasury has borrowed RON24.1bn and EUR506.7m from the local market since the beginning of the year.

The finance ministry’s external debt issuance last year reached EUR2bn, in a double issue at the beginning of February, USD1.2bn in a placement on Jun 9 and EUR1.75bn in a Eurobond issue in October, nearly completing the external borrowing plan for 2018. That was added to RON43bn and EUR361m borrowing from the local market.

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