The foreign issuers continue to develop the market of RON bonds, while the Finance Ministry would still not say clearly when the issues of government securities should be resumed.
Citigroup Romania arranged and placed a bond issue in RON (the equivalent of 28 million euros) for Dexia Kommunalkredit Bank at the beginning of the month.
"The issue, worth 100 million RON, was placed in full. All the investors were domestic companies, mostly insurers," sources close to the transaction told ZIARUL FINANCIAR.
The bonds with a five-year maturity bear a fixed interest of 7.05% per annum.
The bonds were subscribed very quickly, with the operation carried out early in the month. Dexia Kommunalkredit is an Austrian bank that focuses on funding municipalities and is part of the Belgian Dexia group. ABN Amro brokered a bond issue in RON for the World Bank in August. The issue was worth 525 million RON (148 million euros).
These issues are practically "tailor made" solutions, arising from the demand from customers that need investments in low-risk fixed-income securities to achieve a balanced portfolio. This is particularly true for insurance companies. Dexia Kommunalkredit is rated "AA2" by Standard&Poor's rating agency, while the World Bank is rated "AAA". The World Bank's bonds were issued at a fixed interest of 6.5% with a three-year maturity.
Foreign issuers are this way providing benchmark prices for two maturities, and the officials of the World Bank hinted they could come back with more issues, for different maturities.
All this while the Finance Ministry is still analysing the opportunity to modify the law so as to be able to issue bonds even when the Treasury is witnessing excess liquidity, based on the deficits expected for the future. The Finance Ministry last issued bonds in September last year and the promise of the Ministry to build a yield curve is yet to materialise.
Besides insurers, the securities released by foreign issuers, which have a high rating, are also attractive to non-resident investors, who this way can benefit from the still high interests on the domestic market and from RON's appreciation trend.
The Canadians at Toronto-Dominion Bank have opened this market, having brokered two such issues for foreign issuers.
These operations meet the need for cash of various institutions and the demand for investments in currencies of the emerging markets from some investors that have conservative risk exposure policies and could not enter the domestic market directly.
The Austrian government sold bonds worth 100 million euros, with a two-year maturity and a 5.75% fixed interest in April. Shortly afterwards, the Canadians brokered another bond issue for the German financial group KfW Group, which sold bonds in RON at a 6% yearly interest this summer.
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