Romania raises EUR 200 mln with Samurai bond, less than half of target
Romania decided to skip the longer-term maturities (10-year and 20-year) and kept the 3-year, 5-year, and 7-year tranches only while scaling down accordingly the planned aggregate size at JPY 30 bln – the equivalent of just over EUR 200 mln – compared to up to EUR 500 mln initially envisaged, according to the Finance Ministry's press release.
The issue was made in three tranches, of which two-thirds or JPY 22 bln with a maturity of 3 years, with a yield of 2.10%, JPY 3.6 bln with a maturity of 5 years, with a yield of 2.63% respectively, JPY 7.4 bln with a maturity of 7 years and a yield of 3.14%. The funds obtained from this issue will be settled on October 11, 2024.
The amounts obtained will be used in accordance with the issuer's Green Sovereign Bond Framework, which is aligned with the Green Bond Principles administered by ICMA.
The issue was planned as a first step towards returning to the Japanese market rather than providing abundant financial resources – but even so, the term structure of the bond, as anticipated, is not particularly encouraging.
Finance minister Marcel Bolos hailed the step, however.
"This first issue reflects the confidence of international investors in the prospects of the Romanian economy," said minister Bolos, quoted in the press release.
The Ministry of Finance said it plans to issue Samurai bonds frequently following this successful debut in the Japanese market.
Hungary and Slovenia also issued Samurai bonds in September (the equivalent of EUR 250 mln and EUR 311 mln, respectively), with the maturities and results summarised in the table below.
With an inferior sovereign rating, Romania (BBB-) paid 159 basis points (bp) versus mid-swap (MS) for 3-year maturity, compared to 109bp paid by Hungary (BBB, 1 notch above Romania) and only 25bp paid by Slovenia (A, 4 notches above Romania).
Notably, Romania classified its bonds as "green," meaning the yields should have been slightly above normal bonds for the same maturities.
iulian@romania-insider.com
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