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Romania rejects all bids in 300 mln lei (65 mln euro) 2022 T-note auction

Romania rejects all bids in 300 mln lei (65 mln euro) 2022 T-note auction Romania's finance ministry

BUCHAREST (Romania), October 19 (SeeNews) - Romania on Thursday rejected all bids in a 300 million lei ($77 million/65 million euro) auction of Treasury notes due on March 8, 2022, central bank data showed.

Demand in the auction stood at 366 million lei. The issue will be reopened on Friday when the finance ministry hopes to raise 45 million lei in a non-competitive tender.

At the previous auction of the same T-note issue held in September, the finance ministry sold only 349 million lei of the planned amount of 500 million lei at a yield of 2.71%.

This is the fifth consecutive auction in October in which the finance ministry has rejected all bids. The ministry has said it planned raise 2.44 billion lei in auctions of government paper this month.

Commenting ahead of the Thursday's auction, Raiffeisen Bank analysts noted that this week, Romania's central bank BNR offered funds to the local banks through the third REPO operation in October but the demand for funds was zero. At the previous two auctions, BNR injected in the banking sector a total of 13.5 billion lei in order to cover the liquidity shortage which emerged in the money market starting from mid-September.

"Most likely, the banks’ liquidity conditions improved in the past days, this being the last week from the current minimum reserved requirements maintenance period. Still, we expect the liquidity shortage in the money market to persist for some weeks," Raiffeisen analysts said in a daily market report.

However, public authorities are likely to fuel back part of the liquidity in the money market by realizing the bulk of the public budget deficit in November-December, analysts concluded.

Details follow:

Auction date October 19 September 23
Amount offered (mln lei) 300.0 500.0
Amount sold (mln lei) - 349.0
Total bids placed (mln lei) 366.0 423.7
Bid-to-cover ratio 1.22 5.53
Yield (%) - 0.84

Romania's finance ministry has said it planned to auction 2.2 billion lei worth of government securities and to sell an additional 240 million lei in non-competitive offers in October.

In September, the ministry auctioned 3.35 billion lei worth of domestic debt paper and an additional 405 million lei in non-competitive offers, slightly below target.

On Wednesday, the finance ministry raised 1 billion euro ($1.17 billion) through the sale of 10-year Eurobonds at a yield of 2.114% amidst solid demand. According to the ministry, with the transaction, Romania closed its 2017 external financing plan of 3 billion euro.

So far this year, the ministry has sold some 37.5 billion lei and 340 million euro worth of government bills and bonds and has tapped foreign markets for 2.75 billion euro of 2027 and 2035 Eurobonds.

In June, the ministry said it plans to sell 7.5 billion euro worth of Eurobonds on the international markets in the following two years.

The ministry said it plans to sell some 48-50 billion lei worth of leu-denominated domestic debt this year.

In June, the ministry said it planned to sell 7.5 billion euro worth of Eurobonds on international markets in 2018 and 2019.

(1 euro=4.5921 lei)

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