Bloomberg News

Romania to Sell Bonds in Euros on Local Market at Lowest Yield

April 11, 2013

Romania’s borrowing costs are set to drop to a record low at the second sale of euro-denominated bonds on the domestic market this year.

The government plans to raise 200 million euros ($262 million) in the reopening of three-year bonds due February 2016, according to the Finance Ministry’s monthly issuance calendar published on Bloomberg. The yield will be between 2.8 percent and 2.95 percent, according to estimates from analysts at Erste Group Bank AG, Piraeus Bank Romania SA and Societe Generale SA. That compares 3.14 percent for similar-maturity debt sold Jan. 22.

“The issue marks another step toward building up the local debt market,” Mihai Patrulescu, a Bucharest-based senior economist at UniCredit Tiriac Bank SA, wrote in a note. “The ministry shouldn’t encounter difficulties in raising the planned amount.”

The Finance Ministry cut its local debt issuance plan to between 10 billion lei ($3 billion) and 12 billion lei in the second quarter after raising 18.4 billion lei and 503 million euros in the first quarter, Diana Popescu, the head of Treasury at the ministry in Bucharest, said in an interview yesterday. It plans to borrow 2.5 billion lei this month, excluding today’s sale.

Romania’s local bonds have rallied this year after JPMorgan Chase & Co. and Barclays Plc said some of the country’s securities are eligible for entry to their government debt indexes. Yields fell below 5 percent at a two-year leu- denominated debt auction on April 8 for the first time since the central bank started recording the data in 2005.

The leu weakened less than 0.1 percent to 4.3910 per euro by 11:36 a.m. in Bucharest today, halting the longest winning streak in more than five months, according to data compiled by Bloomberg. The currency has gained 1.3 percent so far this year, the second-best performance among currencies in eastern Europe and Africa tracked by Bloomberg.

To contact the editors responsible for this story: James M. Gomez at Balazs Penz at;

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