Romania Plans Eurobond Sale by July as Yields Decline to Record

Romania plans to tap global bond markets by July, following Slovakia in taking advantage of record-low yields, a Finance Ministry official said.

The government is seeking to expand the average maturity of its debt by selling a Eurobond with a term of more than 10 years, Diana Popescu, deputy head of the ministry’s treasury department, said yesterday in a phone interview. She didn’t say how much Romania plans to raise at the sale, which would be the first since October.

“We’re planning a transaction in the first half of the year,” Popescu said from Bucharest. “Our plan is to extend the maturity to more than 10 years.”

Romania plans to borrow 2.5 billion to 3 billion euros ($2.9 billion to $3.5 billion) on international markets in 2015 to cover maturing debt and fund the budget gap. With sovereign-bond yields depressed as central banks seek to quell deflation risks, Slovakia on Jan. 13 became this year’s first eastern European nation to sell a Eurobond. The 12-year debt placement raised 1.5 billion euros at a record-low yield of 1.442 percent.

Romania’s leu was little changed against the euro late yesterday in Bucharest. The yield on the government’s euro-denominated bond due 2024 rose two basis points to 2.16 percent, near the lowest level since it was first sold last month, according to data compiled by Bloomberg.

Romania, which relies on a precautionary accord with the International Monetary Fund and the European Union to shield it from potential market turmoil, needs to repay a 1 billion-euro Eurobond due March, data compiled by Bloomberg show. It has a financial buffer of more than 9 billion euros that can be used to repay debt, Finance Minister Darius Valcov said Dec. 12.

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