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UPDATE 1 - Romania raises 1.75 bln euro in sale of Eurobonds amid strong demand

UPDATE 1 - Romania raises 1.75 bln euro in sale of Eurobonds amid strong demand Romania's finance ministry. Author: Gabriel. Licence: Creative Commons, Attribution.

BUCHAREST (Romania), April 11 (SeeNews) - Romania's finance ministry said on Tuesday it has raised 1.75 billion euro ($1.86 billion) by issuing a new 10-year Eurobond and reopening an existing Eurobond issue maturing in 2035, with demand reaching 2.86 billion lei.

Romania raised 1 billion euro from the sale of the new issue of 10-year government paper at 2.41%, while an additional 750 million euro was raised from the 2035 Eurobond reopening at 3.55%, the finance ministry said in a press release.

Demand for both issues was strong with 281 orders placed worth almost 2.86 billion euro in total. The new 10-year issue, which bears a coupon of 2.375%, attracted 145 orders, while the 2035 issue with a coupon rate of 3.875% had 136 orders.

"The success of the Eurobond issues shows the credibility Romania enjoys on international markets and the appreciation of its economic development, growth prospects, and its macroeconomic and financial stability - achievements highlighted in recent reports of international rating agencies," finance minister Viorel Stefan said.

On Friday, Standard & Poor's maintained Romania's rating at BBB-/A-3, with a stable outlook, and warned that the country's budget deficit will increase due to the government's loose fiscal policy.

Geographically, the distribution of investors in the new 10-year Romanian Eurobond issue was: 21% from Romania, 18% from Central and Eastern Europe, 15% from Germany and Austria, 14% from the UK, 8% from Italy, 6% from the US, 5% from Benelux countries, 5% from Scandinavia, 3% from Asia and the Middle East and 5% from other countries.

According to the type of investors, fund managers predominated with 42%, followed by banks and central banks with 36%, pension funds and insurance companies with 19%, and central banks with 3%. The issue was managed by Barclays, Citigroup, Erste Group, ING and Societe Generale.

For the 2035 reopened Eurobonds issue, the geographical distribution was as follows: 40% from the UK, 16% from Germany and Austria, 10% from Central and Eastern Europe, 10% from Benelux countries, 8% from the US, 3% from Romania, 1% from Asia and the Middle East and 12% from other countries. About 72% of the investors were fund managers, followed by banks and central banks with 14%, pension funds and insurance companies with 12%, and central banks with 2%.

This is Romania's first Eurobond sale this year. In March, the finance ministry said it plans to sell about 2.5-3.0 billion euro worth of Eurobonds on the international markets and some 48-50 billion lei (10.6-11.05 billion euro) worth of leu-denominated domestic debt this year.

In 2016, Romania raised 3.25 billion euro from the sales of Eurobonds.

($=0.9427 euro)

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