Romanian state launches new bond issue on Bucharest Stock Exchange

The Romanian Ministry of Finance launched on November 18 a new issue of government bonds on the Bucharest Stock Exchange (BVB) as part of the Fidelis program. The offer is valid until December 10.

Investors can choose between three bonds, two of which are in local currency (RON) while the third is in euros.

Local currency bonds have maturities of one and three years and offer an annual coupon of 4% (the one-year bond), respectively 4.6% (the three-year bond). The nominal value of the bonds is RON 100 and the minimum subscription is RON 5,000 (approximately EUR 1,000). By comparison, in September, the finance ministry paid 3.25% per annum for one-year bonds and 3.75% for three-year bonds.

Euro bonds have a five-year maturity and offer an annual interest of 1.8%, compared to 1.6% in September. The minimum subscription in this case is also 1000 EUR.

Although significantly higher than the previous similar issue in September, the annual interest rates offered by these new bonds are well below the most recent annual inflation rates announced for October – 7.9% in Romania and 4.1% in the eurozone, but is expected to ease next year.

The new edition of the Fidelis bond program is managed by BT Capital Partners as lead manager and BCR and BRD as intermediaries, but investors can participate through most local brokerage firms.

This is the sixth issue of Fidelis since July 2020. Through the first five offers, the Ministry of Finance has attracted nearly 8 billion RON (1.6 billion euros) from individual investors.

(Photo source: BVB)

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