Romanian Government borrows EUR 2.5 billion from foreign markets

by Romanian Reporter - Tuesday, November 24, 2020 2:00 PM

Romanian Government borrows EUR 2.5 billion from foreign markets

Romania announced two new Eurobond issues today, with maturities on December 2029 and December 2040.  According to Bloomberg, cited by, the international investors subscribed a total of €8 billion, and the Romanian government limited the bond issue to €2.5 billion, which will probably represent the final amount borrowed. 

The cost of borrowing is at mid-swap(-0.29%)+1.9% for the 9-year bond and 2.8% for the 20-year bond. Depending on the demand and the final amount the government will borrow, the borrowing costs may be different at the closing of the bond issue.

It is the fourth time during this year for Romania to attract foreign cash through bond issuance. Most recently, in July, the government borrowed $3.3 billion from external markets. The other two borrowing rounds were in May (€3.3 billion) and in January(€3 billion). Besides these borrowings, the Ministry of Finance has consistently attracted funds from the internal market, from institutional investors as well as individual investors.

The budget deficit for 2020 required a need for a record lending amount, 143.6 billion RON (€29 billion), but the Ministry of Finance has already secured the funding for this year and wasn't planning any other external borrowing for 2020. The reason for today's bond issuance is the favorable market conditions, so the attracted funds will be used for covering next year's budget deficit, which will still be extremely high (estimated at 7%), compared to this year's 9.1% estimated deficit.

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Photo: Ministerul Finantelor

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