Romania plans to raise as much as $1.5 billion in its first sale of dollar bonds in a year to finance maturing debt and its budget deficit.
The Finance Ministry is looking to sell between $500 million and $1.5 billion of the securities with a maturity of at least 10 years, according to a document published on the government’s Official Journal website today.
Romania last sold dollar bonds in February 2012, raising $750 million in bonds maturing in 2022 at a yield of 6.45 percent. The rate was 4.11 percent today, after climbing seven basis points, or 0.07 percentage point, according to data compiled by Bloomberg. Romania’s borrowing costs have tumbled in the past year as tension eased between President Traian Basescu and Prime Minister Victor Ponta.
“The bond yields will fall below 6 percent, definitely much lower than the last dollar bond issue, as Romania is stable from a budgetary point of view,” Ponta told reporters in Bucharest today. “We have a stable political environment and we’re now borrowing money at the cheapest possible price” on the local market, he said.
The eastern European country aims to tap markets through a 7 billion-euro ($9.4 billion) medium-term note program that’s designed to help the administration sell debt quickly. It plans to raise 2.5 billion euros through bond sales abroad this year.
The finance ministry mandated Barclays Plc, BNP Paribas SA, Citigroup Inc. and HSBC Holdings Plc to hold investor meetings in Europe and the U.S. this week. It didn’t specify the timing for the sale.