Foreigners sell loads of bonds in RON

Demands by foreign investors, interested in investments in RON are forcing big foreign banks to find ways to issue bonds in Romanian currency, now that the Finance Ministry is not present on the market anymore. Credit Suisse First Boston has already launched two note issues with a two-month maturity and a 6.5% interest rate in RON through private investment, each worth the equivalent of 50 million euros. In April, the Canadians at Toronto-Dominion Bank sold bonds with a two-month maturity in RON, on behalf of the Austrian state – with a minimum risk, and a coupon of 5.75% a year. The issue stood at a total of 100 million RON. Bank sources say that Toronto-Dominion Bank intends to launch a new issue or to reopen the first, after being successful with its first bond. By means of a technical mechanism, these banks generated assets in RON, by borrowing euros and by turning the RON they obtained into euros. It was expected that other banks would resort to such options in order to meet the demands of clients who want exposure to the RON to take advantage of the high yields brought by the Romanian currency, as Romania prepares for EU integration. ZF