Bloomberg News

Romania Seeks to Raise as Much as $2 Billion in Dollar Bonds

November 13, 2011

(Updates with Finance Ministry comments from third paragraph.)

Nov. 11 (Bloomberg) -- Romania seeks to raise as much as $2 billion in dollar-denominated bonds under a second international sale this year, depending on market conditions, the Finance Ministry said.

The ministry wants to raise at least $500 million in bonds with a maturity of at least five years, according to an official order of the finance minister published in the country’s Official Journal. The planned sale is part of the ministry’s 7 billion-euro ($9.5 billion) medium-term notes program through 2013.

The ministry “approves the second transaction on international capital markets under the medium-term notes program,” according to the document. “The final amount, maturity, interest rate and the other financial terms will be set up at the time of the sale, depending on market conditions.”

The eastern European country is meeting investors in London and across the U.S. starting today until Nov. 16 as it seeks to tap international markets for the second time this year to reduce borrowing costs and help keep its budget deficit within 4.4 percent of gross domestic product.

Romania stopped relying on a bailout from the International Monetary Fund and the European Union in March from a 20 billion- euro bailout and cut state wages and raised taxes to narrow its budget deficit.

IMF Plans

The country signed a new precautionary agreement with the IMF and the EU valued at 5 billion euros and has so far completed three quarterly reviews, after meeting pledges to the international lenders. Romania doesn’t plan to draw any funds from the precautionary accord, which will be stored in Washington for emergency needs.

Romania sold its first bonds under the medium-term notes program in June, when it raised 1.5 billion euros of five-year bonds in its biggest offering of debt to international investors.

“We think Romania is a good story for investors,” Deputy Finance Minister Bogdan Dragoi said yesterday after announcing the planned roadshow. “We’re doing this now, after the IMF and EU quarterly review showed we had a very good performance and we have the 2012 budget outline. We’re, of course, more cautious in our estimates and with our budget, considering the European debt crisis.”

Citigroup Inc., Deutsche Bank AG and HSBC Holdings Plc will be managers of the sale, the ministry said.

--Editors: Douglas Lytle, Alan Crosby

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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