Termoelectrica in luck on foreign markets

Termoelectrica, the second state-run Romanian company to turn to the international capital markets at this time of year has borrowed $200 million for five years at a variable interest that starts from 4.9% (3.5% above LIBOR on six months – the reference rate on the London interbank market). The notes issue maturing in five years was welcomed by investors, with the credit secured by the Finance Ministry. The issue was brokered by a consortium comprised of JP Morgan and HVB. Termoelectrica is due to put out an eurobond issue, as well, worth about 120 million euros and aimed at financing affiliate companies. The interest Termoelectrica got for this issue is the lowest granted to a Romanian entity in the past 12 years. This does not necessarily mean that Termoelectrica could not pay more throughout the five years for which it took the loan, given that its cost will fluctuate according to the LIBOR trend. Market circumstances are most favourable at the moment, as LIBOR has reached a very low level, that is 1.4% and chances are it will stay down for quite a while. ZF