The Romanian state manages to borrow increasingly cheap on thelocal market, despite the social tensions and the deterioratedsituation on international financial markets. The Treasuryyesterday fully sold a bond issue worth 700 million RON (166million euros) that matures in 2017, with bonds yielding an average7% a year. This is slightly lower than the yield obtained at asimilar auction held in April, when the average yield was 7.02% ayear. That was the first time in two years that the Treasury issuedbonds with such long maturities. Dealers say, however, that theinterest rate at which the bonds were placed yesterday isunexpectedly low, in the context where bonds were traded at yieldsof over 7.2% a year on the secondary market. "Apparently foreigninvestors did not purchase anything, they were even more interestedin selling Romanian bonds. The buyers were probably insurancecompanies and local banks that keep bonds until they mature,without adjusting their value based on market progression," saidthe dealer of a local bank.
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