Romania Says Moves Eurobond Issue to 2010, Caps Yields at 10% - Reuters

The finance ministry has a government mandate for a Eurobond worth between 500 million and 1.5 billion euro, with a maturity range of 5-10 years.

"We will issue it sometime in 2010. But the 2010 debt strategy envisions issues on both the domestic and international market," Reuters reported quoting deputy Finance Minister Bogdan Dragoi as saying on the sidelines of a conference.

The Eurobond was initially planned for October this year. The ministry had already picked Deutsche Bank, EFG Eurobank, and HSBC Bank as the issue’s lead-managers, and a consortium comprising international law firm Slaughter and May and Bucharest-based Bulboaca&Asociatii as the legal advisor.

Dragoi also said the ministry will not accept yields higher than 10% at its domestic debt tenders. Romania has sold 51.9 billion lei ($18 billion/12.1 billion euro) in government debt paper so far this year.

Analysts said upward pressure on yields had increased because of the political woes in the country, and the ministry would eventually be forced to accept higher yields this year, Reuters said.

The finance ministry has rejected all offers in a string of sales or issued bills in much lower volumes than originally planned in recent weeks, as banks asked for too high yields.

The International Monetary Fund (IMF) last week halted talks over Romania's 20 billion euro rescue package and postponed a 1.5 billion tranche originally planned for December until a functioning government replaces the interim cabinet of Emil Boc. Boc's cabinet fell in a no-confidence vote last month.

($ = 0.6692 euro)