The Ministry of Public Finance (MFP) will continue to receive proposals from investment banks until Monday for brokering new issuances, worth a minimum €500 million and with a maturity of at least five years, scheduled for the second part of this year. The leader of the brokerage group could receive 0.3-0.6 percent of the value of the issuance, according to analysts.
“MFP is trying to benefit from the window of opportunity created by the agreement with the IMF [International Monetary Fund], which improved the perception of foreign investors regarding Romania, and raised their confidence that the National Bank of Romania has the situation under control, and from the low interest rates in the euro zone,” said Nicolae Albu, Investment Manager of Erste Asset Management Romania (EAM).
The minimum limit of the interest rate estimated above is the same as the coupon rate for the €300 million bond issue for the local market, which is to take place today. However, analysts warn about the short validity of the maximum limit, due to market volatility, and the perception regarding uncertainties related to Romania’s macroeconomic indicators. “I believe this opportunity should be exploited in one month or two at most, otherwise it could be too late,” the General Manager of Explore Asset Management, Cristian Tudorescu, said.
Hungary launched a successful issuance of €1 billion on five years with an interest rate of 6.75 percent one month ago. “I cannot see why Romania’s operation would not be a success also. The degree of confidence and the appetite for risk at the international level, and at the emerging Europe level are rising,” said David Oxley, analyst Capital Economics.
