Germans buy 25% of Romanian bonds

The interest was the one that set the value of the eurobond issue launched by the Finance Ministry to 600 million euros, despite demand for 1.3bn euros.

German investors bought a quarter of the eurobonds issue, followed by the Italian and British ones. “The extremely high demand for the new Romanian eurobonds allowed the Romanian authorities to modify the terms of the issue in order to obtain a lower interest,” Cristian Popa, NBR vice-governor, told Ziarul Financiar.

The interest for this issue was 10.625%, against the 11.5% for the issue early this year. This is the largest issue ever and has the longest maturity, as well, and its price is “a very good one considering the country risk,” Finance minister Mihai Tanasescu said.

“This transaction was the Government’s way to attain some top goals such as expanding the yield curve (i.e. the actual interest) of the Romanian bonds, thus creating a benchmark rate for the bond issue on the capital market for seven years, balancing the internal funding of the state budget deficit with the external funding, as well as keeping issue costs down to a minimum,” the Finance minister added.