Romania’s Eurobond Yields Rise to Highest in Month; Leu Falls

Romania’s Eurobond yields rose to the highest level in more than a month as a plan to renew the nation’s safety-net accord with the International Monetary Fund next year may increase the appeal of local currency debt.

Yields on 2018 euro-denominated bonds advanced six basis points, or 0.06 percentage point, to 4.76 percent, the highest since Oct. 4. The leu weakened less than 0.2 percent to 4.5260 per euro by 5:32 p.m. in Bucharest, falling for a third day.

Romania seeks to secure a new precautionary agreement with the IMF that will act as a safety net against “serious turbulences” in financial markets, Prime Minister Victor Ponta said yesterday. The nation’s current 5 billion-euro ($6.4 billion) accord with the IMF expires in April.

“We think a new precautionary agreement with the IMF will be positive for leu government securities,” Nicolae Covrig, a Bucharest-based analyst at Raiffeisen Bank Romania SA wrote in a note today.

The yield on 2019 Eurobonds climbed four basis points to 5.04 percent, while the 2022 dollar debt yields was little changed at 4.61 percent, according to data compiled by Bloomberg.

A campaign for general elections started today, a month before a ballot on Dec. 9 as ruling coalition parties, supporting Ponta face the opposition, backing President Traian Basescu.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net Irina Savu in Bucharest at isavu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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