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EBRD invests 26 mln euro in Romania's BCR inaugural senior non-preferred bond

EBRD invests 26 mln euro in Romania's BCR inaugural senior non-preferred bond Source:EBRD

BUCHAREST (Romania), December 16 (SeeNews) - The European Bank for Reconstruction and Development said on Monday it is investing 26 million euro ($28.9 million) in a senior non-preferred bond issue by Romania's Banca Comerciala Romana (BCR) worth 600 million lei ($140 million/125.5 million euro).

BCR will use the EBRD’s funds to finance investments in the green economy, such as energy efficiency and renewable projects, the European bank said in a press release.

"The EBRD will continue to support the development of Romanian capital markets and is encouraging other local banks to make use of senior non-preferred bonds and other long-term capital market issuances," EBRD Director for EU Banks Lucyna Stanczak-Wuczynska said.

With the successful placement of the senior non-preferred bonds, Romania’s second largest lender is taking a big step towards compliance with new EU regulations, the EBRD said.

The seven-year bonds will be listed on the Bucharest Stock Exchange and will be the first time that BCR has tapped into the local capital market with an issuance denominated in Romanian lei in the past 13 years. It is also the first issuance of senior non-preferred debt in Romania and in central and eastern Europe, following the implementation of the EU Bank Recovery and Resolution Directive, which has been designed to make banking systems more robust.

This would allow the bonds to qualify for minimum requirements for own funds and eligible liabilities (MREL), to be set by Romania's central bank for BCR, the EBRD noted. 

"The bond issue reflects our confidence in the local market, but also our good relationship with institutional investors, including the EBRD, one of our long lasting partners. The diversification of our sources of finance has long been in our development strategy. Moreover, we strongly believe that our early action will contribute to further developing the capital market in Romania," BCR CEO Sergiu Manea said.

BCR is majority owned by Austria's Erste banking group.

On Friday, Fitch Ratings assigned BCR senior unsecured bonds a final 'BBB+' long-term rating. 

(1 euro=4.7781 lei)