Romania issues EUR 5 bln FX bonds to finance excess public deficit
<p>While preparing the first Samurai bonds in the past decade, Romania tapped on September 19 the international bond market by raising the equivalent of EUR 5 billion with three issues denominated in euros (two issues) and US dollars, according to <a href="https://www.zf.ro/banci-si-asigurari/ministerul-finantelor-a-imprumutat-joi-5-mld-euro-de-pe-piata-22490958?mc_cid=7db81a74b2&amp;mc_eid=cd1f92f96c" rel="noopener" target="_blank">Ziarul Financiar</a>.</p>

<p>They account for a significant part of the RON 37 bln (EUR 7.5 bln) supplementary public deficit financing prompted by the 1.9%-of-GDP public fiscal deficit slippage from under 5% of GDP to 6.95% of GDP this year.</p>

<p>In the first issue, EUR 2.25 bln denominated in euros with a maturity of 7 years was made at an interest rate of mid-swap plus 2.75 percentage points.</p>

<p>In the second issue, denominated in euros, with a maturity of 20 years, Romania borrowed EUR 750 mln at mid-swap plus 3.5 percentage points.</p>

<p>In the issue denominated in US dollars, Romania borrowed USD 2.10 bln at the interest rate of 10-year US government bonds plus 2.1 percentage points.</p>

<p>Investors' interest was roughly three times larger than the final size of each of the three issues: EUR 7.2 bln for 7-year bonds denominated in euros, USD 8.5 bln for 10-year US-denominated bonds, and EUR 2.3 bln for 20-year bonds denominated in euros.&nbsp;</p>

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

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