Romania raises EUR 200 mln with Samurai bond, less than half of target
<p>Romania decided to skip the longer-term maturities (10-year and 20-year) and kept the 3-year, 5-year, and 7-year tranches only while scaling down accordingly the planned aggregate size at JPY 30 bln – the equivalent of just over EUR 200 mln – compared to up to EUR 500 mln initially envisaged, according to the Finance Ministry's press release.</p>

<p>The issue was made in three tranches, of which two-thirds or JPY 22 bln with a maturity of 3 years, with a yield of 2.10%, JPY 3.6 bln with a maturity of 5 years, with a yield of 2.63% respectively, JPY 7.4 bln with a maturity of 7 years and a yield of 3.14%. The funds obtained from this issue will be settled on October 11, 2024.</p>

<p>The amounts obtained will be used in accordance with the issuer's Green Sovereign Bond Framework, which is aligned with the Green Bond Principles administered by ICMA.</p>

<p>The issue was planned as a first step towards returning to the Japanese market rather than providing abundant financial resources – but even so, the term structure of the bond, as anticipated, is not particularly encouraging.</p>

<p>Finance minister Marcel Bolos hailed the step, however.</p>

<p>"This first issue reflects the confidence of international investors in the prospects of the Romanian economy," said minister Bolos, quoted in the press release.</p>

<p>The Ministry of Finance said it plans to issue Samurai bonds frequently following this successful debut in the Japanese market.</p>

<p>Hungary and Slovenia also issued Samurai bonds in September (the equivalent of EUR 250 mln and EUR 311 mln, respectively), with the maturities and results summarised in the table below.&nbsp;</p>

<p>With an inferior sovereign rating, Romania (BBB-) paid 159 basis points (bp) versus mid-swap (MS) for 3-year maturity, compared to 109bp paid by Hungary (BBB, 1 notch above Romania) and only 25bp paid by Slovenia (A, 4 notches above Romania).&nbsp;</p>

<p>Notably, Romania classified its bonds as "green," meaning the yields should have been slightly above normal bonds for the same maturities.</p>

<p><em>iulian@romania-insider.com</em></p>

<p><em>(Photo source: <a href="https://www.dreamstime.com" rel="noopener" target="_blank">Yurii Kibalnik/Dreamstime.com</a>)</em></p>