BCR issues Medium Term Notes worth 3 bln euro

The bank, controlled by Austrian Erste group, had announced a similar project in 2007, worth €2.5 billion. However, shareholders decided last summer to forego the program and approved a new one. Analysts say this is a good move, because it will secure diversified low-cost financing sources.

“This is an interesting product and will be a test for the capital market. BCR put a lot of thought into this, because calculated as a percentage of total assets, the maximum value of the loan is not a very high amount. It will be interesting to see, when the notes are issued, who and how much will be subscribed,” the head of UniCredit CA-IB Securities Romania Analysis Department, Adriana Marin, told Business Standard.

BCR can use this line of financing just like individuals use credit cards - accessing the funds based on its financing needs, in various tranches. The issue will concern both institutional and retail investors.

“I think this is a sign that the bank is trying to attract capital by taking advantage of the recent increase of appetite of investors for risk,” according to London-based Capital Economics Ltd’s Emerging Europe Economist, David Oxley.

The MTN program was approved by the Luxembourg capital market regulator, Commission de Surveillance du Secteur Financier (CSSF), where the bonds will be issued on 5 June 2009, and where they can be traded, once they are issued.