Romania plans eurobond issue

Monday 11th January 2010

Analysts say the issue is seen attracting high demand as Romania ended three months of crisis last year and is on course to resume a vital 20 billion euros aid programme led by the International Monetary Fund. "Given that we are on a favourable trend and the political turmoil has ended we will issue a eurobond in the first quarter," deputy Finance Minister Bogdan Dragoi told reporters. Hours before the announcement, Finance Minister Sebastian Vladescu told reporters he wanted to launch the eurobond "as soon as possible".

Dragoi said details of the issue have not changed from last year, when Romania postponed it indefinitely amid three months of deadlock on efforts to form a government, adding that he was considering more eurobond issues throughout 2010.

Improved sentiment on Romania was also proven by a T-bill auction in early January, when the government sold more than planned at an average yield of 9.24 percent, against 10 percent at similar tenders in the fourth quarter.

The leu currency also outperformed regional peers since the start of the year, gaining some 2.6 percent from a December 31 close and hitting an eight-month high against the euro the same day.

"Judging by results of the latest auctions, the evolution of the exchange rate and the narrowing of CDS spreads, Romania is on a good trend and the timing seems appropriate," said Vlad Muscalu, analyst with ING Bank in Bucharest.

The ministry is seeking to sell four billion lei in local currency bills and bonds in January and a total of 10-12 billion lei in the first quarter this year. It did not disclose a full issuance figure for 2010.

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