October 12 (SeeNews) - Romania on Thursday rejected all bids in a 600 million lei ($155 million/131 million euro) auction of Treasury bills due on October 15, 2018, central bank data showed.
Demand only amounted to 360.4 million lei.
This is the third failed auction in October, when the finance ministry has planned to raise 2.44 billion lei.
On October 5 and 9, Romania rejected all bids in two auctions of Treasury notes due on February 25, 2019 and on April 29, 2024, respectively.
The finance ministry rejected the last few all bids to avoid higher interest costs, but it could be constrained by the level of cash reserves in the future, Erste Bank analysts said on Thursday in a daily market comment.
"Romania is required by the EC under the post-program surveillance to hold a liquidity buffer of at least four months of gross funding needs, which is the equivalent of 5 billion euro. The ministry has thus limited space for rejecting additional auctions in the next months, although repayments in the fourth quarter amount to 2.3 billion lei only," Erste analysts said.
Details follow:
| Auction date |
October 12 |
| Amount offered (mln lei) |
600.0 |
| Amount sold (mln lei) |
- |
| Total bids placed (mln lei) |
360.4 |
| Bid-to-cover ratio |
0.60 |
| Yield (%) |
- |
Romania's finance ministry plans 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 plans to sell 7.5 billion euro worth of Eurobonds on the international markets in 2018 and 2019.
(1 euro=4.5915 lei)