Standard & Poor's rating agency upgraded Romania's ratings by one notch. The official statistical data show a month-to-month consolidation in the economic growth that started last year.
Investors on the international capital markets are more and more optimistic about Romania. The question is: under the circumstances, could Romania get a better interest for the bond issue due for launch next week and whether the drop in interest would be a significant one or just symbolic.
The bankers say this is a time when Romanian eurobonds are in higher demand, but it is highly unlikely that the interest would be much lower that the one levied last winter.
Misu Negritoiu, ING Bank's deputy general manager, estimates S&P's announcement will not have a major impact on the costs for Romania's borrowings, as the essential thing is that the Romanian eurobonds have been moved one step forward, from "noninvestment grade" assigned to highly risky investments to "investment grade" which investors associate with low risk.
He feels an euro-denominated interest rate below 11% is out of the question. The banks authorised by the Finance Ministry got an 11.5% interest for the last issue.
"The upgrade in Standard & Poor's rating will certainly bolster Romania's eurobond issue, with real chances of a lower indebtedness cost," Moritz Schularitz, analyst with German-based Deutsche Bank, which took Romania out on the capital markets last fall, told Ziarul Financiar.
He says that international capital markets are contemplating Romania with a "cautious optimism." "The cautiousness comes from the persistence of some uncertainty about the future economic policy," Schularitz says.
The analyst of the most powerful German bank does not believe Romania could get less than 11% in interest, due to the "B" rating assigned by Standard & Poor's, which still spells high risk to investors.
"We must wait for the details of the issue to make an estimate; one thing is sure though: the authorised banks will have no trouble finding buyers," Moritz Schularitz said.
Along with the rating upgrade, the demand for Romanian eurobonds will also be bolstered by the difficult situation of countries such as Turkey and Argentina, which caused an overall increased sensitivity of investors towards risk. Under the circumstances, Romania will be preferred, the German analyst says.
"One thing is certain: all things considered, Romania has one of the lowest country ratings in the region. The 1.6% GDP growth last year is not much, it's just better than recession. There are plenty of reasons why we should believe things would not go that smoothly, as long as the radical economic restructuring measures are mere intentions," Moritz Schularitz added.
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