Romania Sells 10-Year Eurobond at Lowest Yield on Record

Romania raised 1.25 billion euros ($1.7 billion) in its second international bond sale this year, taking advantage of record-low borrowing costs to finance its budget deficit.

The government sold 10-year bonds today at a yield of 200 basis points above mid-swaps, the equivalent of 3.7 percent, the lowest on record for the country, Budget Minister Liviu Voinea said in a phone interview. Citigroup Inc., ING Groep NV, Societe Generale SA and UniCredit SpA managed the sale, Diana Popescu, deputy director at the Treasury, said by phone.

“We’ve completed our international funding needs for this year eight months ahead of schedule with today’s sale,” Voinea said. “This doesn’t mean that we won’t issue again if market opportunities allow, but it will be to pre-finance 2015.”

Romania, the European Union’s fastest growing economy in the fourth quarter of 2013, is seeking to attract capital outflows from Ukraine. Investors are pulling money out of Romania’s northeastern neighbor as concern mounts that Russia will seize more of Ukraine after annexing Crimea in March.

The yield on Romania’s eurobonds due in 2020 fell 2 basis points to 3.097 percent at 8:14 p.m. in Bucharest, a record low, according to data compiled by Bloomberg. The leu fell 0.1 percent to 4.4713 per euro at 9:45 p.m.

“The disputes between Russia and Ukraine remain important to watch, but I would say investors have now digested the fact that as long as negotiations continue in Ukraine the contagion impact on central Europe is minimal,” Raffaella Tenconi, a London-based economist at Bank of America Corp., said by e-mail.

Romania raised $2 billion in dollar-denominated debt on Jan. 14. The country sold 30-year bonds, the longest maturity yet, and 10-year bonds at yields 245 basis points and 215 basis points higher than similar-dated U.S. Treasuries, respectively.

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