Romania launches eurobonds after 5 years

The Finance Ministry made a surprise move on the international capital markets yesterday and launched the ten-year-eurobond issue prepared since as early as the end of last year. As a result, Romania returns to the external market after a 5-year break during which time the budget deficit was primarily financed by the domestic market and the proceeds of privatisation. The explanation for this decision, which was made virtually “overnight”, is that the Finance Ministry concluded that the liquidities it has available are not sufficient enough to cover both the repayment of the 664 million-euro eurobonds, which mature on June 27, and the budget deficit, which is due for registered in May. Last week, the Finance Minister Varujan Vosganian said that it had been decided “in principle” that the repayment of eurobonds, which will reach maturity this month, would be conducted using privatisation proceeds, which he regarded as sufficient, and added that there would not be enough time for the bond issue. He then said that May brought about a budget deficit, and now, plans have completely changed. Alongside the NBR (National Bank of Romania) and the banks selected to manage the issue, the Finance Ministry has constantly tested the investors’ appetite over the last few months, with the latest road show being organised on June 2. The Government approved the launch of a ten-year eurobond issue worth somewhere between 500 million euros and one billion euros last winter.