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BNR official: Romania must wait for market sentiment to settle, before a new bonds issue

Romania must wait for the market sentiment to settle down before borrowing again from the foreign capital market, says deputy governor of the National Bank of Romania (BNR) Cristian Popa.

'We used to talk in August-September about the net issues from emergent markets. The investors' sentiment was much better in late October-early November only to worsen now again. I do not have any idea how it will look like in two weeks or a month or at the beginning of 2012. We have to wait for the market sentiment to improve in order to jump to the next decisions,' said the BNR deputy governor, present at the conference 'Analysing Romania's future economic potential,' held by 'The Economist' group.

The BNR official said that Romania has an economic prospect with a solid foundation, but it is harmed by the risk aversion displayed by investors, both Europeans and international. Inquired whether Romania 'missed the train' for 2011 regarding a second issue of bonds on the foreign capital market, Popa said that the market sentiment vis a vis risk is constantly changing.

About Germany's recent failure to borrow from the capital market, the BNR deputy governor said that the investors all around the world are wary of the risk and prefer liquidity, even if not much time ago they used to migrated from the bonds issued in euro issued by the peripheral countries towards the German bonds.

On November 11, the Ministry of Public Finance (MFP) launched a roadshow (promotion tour) for a possible issue of bonds on the international markets, whose brokers would be Citibank, Deutsche Bank and HSBC.

Romania has a three-year plan to draw seven billion euros from international investors, during which it sold this June euro-denominated bonds worth 1.5 billion euros.

MFP announced initially that the second issue should occur in November, either in euros or in dollars, depending on the circumstances on the market.

The first issue had a credit default swap of 255 basis points, slightly below the target set at 260 basis points, whereas the total demand was three billion euros.

Sursa: http://www.actmedia.eu

Tags: market issue bonds sentiment bnr romania mfp euro

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