Erste Bank sells 150m-RON bonds in RON

Erste Bank, the majority shareholder of BCR (Banca Comerciala Romana), will start the second stage of its programme to issue bonds in RON this week, which will be worth 150 million RON (around 41.6 million euros), after the first stage was launched last week. The first stage, worth 70 million RON, has been completely sold. The bonds have a two-year maturity, and were sold with an interest rate based on the ROBOR reference rate of the Bucharest financial market plus a margin of 40 base points (0.4 percentage points). “This is a first for Erste Bank, so the first stage was a test to see how the market is responding, and it went unexpectedly well, which gives us confidence that investors are returning onto the market,” Ionut Stanimir, spokesperson for Erste Bank told ZF. The bonds were purchased by selected Romanian institutional investors and by private banking clients of the Austrian group. Where the capital will go has not been revealed, but it could be used to cover BCR’s cash needs, or for direct funding from Erste Bank. If successful, the bank could be encouraged to release further bond issues in the coming period. No other bank on the local market has issued RON-denominated bonds for around two years since the trend was first in full swing. Banks sell and list such bonds directly on the foreign markets, due to lower costs, as well as foreigners’ appetite for placements in RON.