Romania raises 4 bln euro through dual-tranche eurobond issue

The eurobond was oversubscribed at 14.8 billion euro, with 250 investors having participated in the auction held on February 15, the finance ministry said in a press release on Thursday. The green tranche saw demand exceed supply fourfold, while the ordinary bonds were oversubscribed threefold.

According to the finance ministry, the twelve-year maturity represents the largest euro-denominated green tranche launched so far by an issuer from emerging markets for environmental, social and governance (ESG) debt instruments. The transaction also marks the largest issue of euro-denominated green bonds made by an emerging market issuer.

The twelve-year green tranche has a yield of 5.734% and an interest rate of 5.625% per year, while the seven-year tranche has a yield of 5.394% and an interest rate of 5.375%.

The green tranche will provide financing for sustainable projects such as the development of the metro networks in Bucharest and Cluj-Napoca, the electrification of the railway in Romania’s main urban areas, the enhancement of energy efficiency in buildings, the creation of new urban forests, and the rehabilitation of flood protection lines.

In January, Romania also reaped $4 billion in its first international debt sale of the year.

In 2024, Romania needs to secure 180 billion lei ($39.16 billion/36.18 billion euro) to finance its estimated 17 billion euro budget deficit and roll over its 19 billion euro debt maturing this year, business daily Ziarul Financiar reported in January, quoting Ionut Dumitru, chief economist at Raiffeisen Bank.

($=0.924 euro)