Raiffeisen hopes to raise 30m euros

Next Monday, Raiffeisen Bank will become the second bank to issue corporate bonds on the Romanian market. In this way, Romania’s third largest bank hopes to raise 1,200bn ROL (about 30 million euros). The loan will mature in three years time. Probably encouraged by the successful issue of bonds by BRD-SocGen last month, Raiffeisen wants to raise even more cash from investors. A lower rate of interest is being offered, as it expects demand to be great enough to make a higher rate unnecessary. The interest BRD pays is indexed every six months and equals the interest on the six-month deposits made by banks on the interbank market – BUBOR. The first coupon of BRD bonds will provide an annual 21.28% interest to investors. The interest on Raiffeisen bonds will be similarly indexed every six months. It will, however, be calculated as an average of the interest on deposits obtained by banks on the interbank market (BUBID/BUBOR) for six months, plus 0.5%. Given the current rates on the interbank market, Raiffeisen’s formula will yield an interest rate of 20.38%, lower than BRD’s first coupon. ZF