BRD to issue bonds

The Extraordinary General Meeting (EGM)) of BRD-Groupe Societe Generale shareholders on January 23 will debate and endorse the release of several bond issues up to 1,500bn ROL on the domestic market this year. The EGM will also authorise the Board of Directors to set the parameters for each of the issues depending on the conditions on the market. No details about the issues have been released yet, but the bank’s president Bogdan Baltazar was saying at the end of last year, when word about such plans spread, that BRD-GSG would most likely go for ROL, that no decision about the number of issues had been made and that the maturities would range between 2 and 5 years. He added back then that the decision had been made in an attempt to secure the necessary longer-term funding resources given that the “long-term liquidity situation has become quite tense lately.” The decline in the savings in the banks month by month and particularly the reluctance towards longer maturities is now forcing banks to find other streams of longer-term cash. The solution seems to come from bonds, which are new financing instruments for the Romanian market, yet common practice in mature economies. ZF