July 15 (SeeNews) - Romania's finance ministry said on Wednesday it has raised $3.3 billion (2.9 billion euro) through the sale of dollar-denominated bonds in two tranches on international markets, with total demand reaching $7.4 billion.
Romania raised $1.3 billion from the sale of a new issue of 10-year government bonds at a 3% interest rate, while an additional $2 billion was raised from the sale of 30-year bonds at an interest rate of 4%, the finance ministry said in a statement.
This is the Romania's first sale of dollar-denominated bonds on international markets since 2018.
The 10-year dollar-denominated bonds yielded 3.045%, while the 30-year government securities yielded 4%.
Demand for both tranches was strong with 400 orders placed worth almost $7.4 billion in total.
"The success of the recent transaction shows the interest of investors in securities issued by Romania in US dollars, as well as their confidence in our country's ability to respond to the crisis caused by the Covid-19 pandemic and in the current government's medium-term economic recovery plan. The loan will be used to cover the growing financing needs, resulting from the budget deficit and the volume of public debt refinancing," finance minister Florin Citu said.
Geographically, the distribution of investors in the new 10-year dollar bond issue was: 39% from Great Britain, 27% from the USA, 10% from Romania, 4% from Germany, 4% from Austria, 4% from Switzerland, 3% from Asia, 3% from Benelux, 2% from central and eastern Europe, 2% from Nordic countries, 2% from Southern Europe, 1% from France, and 3% from other countries.
According to the type of investors, fund managers predominated with 68%, followed by commercial banks with 10%, pension funds and insurance companies with 14% and other types of investors with 6%.
The distribution of investors in the 30-year Romanian dollar bond was: 37% from the USA, 29% from Great Britain, 11% from Asia, 6% from Austria, 6% from Switzerland, 4% from Benelux countries, 4% from Germany, 3% from Romania, 1% from central and eastern Europe, 1% from Southern Europe, and 2% from other countries.
According to the type of investors, fund managers led with 67%, followed by commercial banks with 3%, investment funds with 11%, pension funds and insurance companies with 19%, and other types of investors with 9%.
The issue was managed by Citigroup Global Markets Limited, Erste Group Bank AG, HSBC Bank plc, ING Bank N.V., J.P. Morgan Securities plc and Raiffeisen Bank International AG.
So far this year, Romania has sold 43.5 billion lei of local currency bills and bonds, as well as 150 million euro worth of euro-denominated paper, and tapped foreign markets for 6.3 billion euro worth of Eurobonds.
($=0.8799 euro)