ROMANIA SELLS $5.6 BILLION IN FOREIGN BONDS AFTER AUSTERITY PLAN

(Bloomberg) -- Romania tapped international markets for the third time this year with a $5.6 billion bond sale after the government’s austerity package fueled a rally in its debt securities.

The Black Sea nation offered hard-currency bonds after ending months of political turmoil related to presidential elections that pushed its borrowing costs to the highest in the European Union. The victory of a centrist candidate over a far-right contender in May has triggered a rebound in the country’s assets, which received a further boost when the new government presented spending cuts and tax hikes to curb the EU’s widest budget gap.

The country received combined orders equivalent to more than $10 billion for the sale consisting of dollar-denominated bonds due in 2030 and 2036 and a tap of existing euro notes maturing in 2039, according to a person with knowledge of the matter, who asked not to be identified. 

The $2 billion tranche of 2030 bonds was sold at 185 basis points over US Treasuries while the spread on $1.75 billion of the longer dollar notes was 230 basis points, the person said. The €1.5 billion ($1.8 billion) euro part was priced at 375 basis points over mid-swaps. Books were above $6.7 billion combined on the dollar tranches and exceeded €3.1 billion on the euro tranche, with all spreads tighter than the initial price talk.

Romania is following several emerging-market peers who have braved the uncertainty over US trade policies in recent weeks. Mexico sold $4.5 billion of sovereign debt last month, while Barbados issued $500 million of bonds. 

The government in Bucharest last tapped public international markets in March and had raised more than €8 billion abroad before the latest deal. The long-awaited fiscal package is set to be approved in a fast-track parliamentary procedure in the coming days, but the country still needed to cover significant borrowing needs for the reminder of the year.  

Romania’s foreign bonds have rebounded since the presidential election, although some of its dollar-denominated notes were initially among the worst performers in emerging markets on Wednesday after the news on the increased supply.  

The far-right opposition parties filed a no-confidence motion against the government for the austerity plans on Wednesday, but the move has slim chances of passing given the ruling coalition’s solid majority in parliament. Still, the new administration is also facing the first signs of public discontent over cuts in public wages and pensions as well as tax hikes. 

Bank of America Corp., Citigroup Inc., Erste Group Bank AG, JPMorgan Chase & Co., Societe Generale SA and Raiffeisen Bank International AG are managing the sale. 

--With assistance from Hannah Benjamin-Cook, Olga Voitova, Colin Keatinge and Kevin Kingsbury.

(Updates with fresh spread data and bids starting in the second paragraph.)

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2025-07-09T23:41:06Z