Raiffeisen says go for Romanian bonds

Austria-based Raiffeisen Zentralbank (RZB) analysts recommend investors to buy the bonds Romania is planning to issue on the international financial market.

The analysts say the Romanian bonds will turn out to be profitable given the global interest reduction trend, the rebound in the economic situation of the United States, the success of the issue released by Argentina to pay its national debt, as well as the upgrade of ratings by Standard & Poor’s.

The Finance Ministry is planning to release a 300-400 million-euro bond issue on the international market soon. The yearly interest for the last bond issue in euros reached 11.25%, which is rather high, so that Romania is hoping to get a much better deal for the next issues.

Even though Romania is in no immediate need of funds, RZB analysts feel, it is a good moment, though, as eurobonds are in high demand.

Compared with countries similarly rated, such as Russia, Argentina or Turkey, Romania appears to be a better choice for investors, due to the stabilisation of the political and economic situation, RZB Austria says. Standard & Poor’s, the global rating agency, at the end of last week raised Romania’s ratings by one notch.

The outlook on the ratings remains positive. RZB Austria anticipates a possible further upgrade of the ratings over the next few years, provided that the privatisation, restructuring, disinflation and fiscal deficit curbing policies make constant progress.

Whereas two years ago the authorities in Bucharest had to close down seven institutions, the banking sector is now doing much better. Therefore the banking sector outlook is stable, RZB -Austria feels.