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Municipal bonds drawing many investors

The bonds issued by the municipalities of Iasi, Bacau and Timisoara have drawn a large number of investors, and the success of the three issues indicate a high interest in financial instruments paying a fixed income, as the stock exchange is facing its deepest downs in history, daily Ziarul financiar remarks.

The RON 100-million bond issue of the Iasi municipality, worth some 27.8 million euros, that closed last week was fully subscribed, say officials of the VMB Partners consulting firm, an advisor to the municipality.

This has been the largest issue of municipals so far floated on the Bucharest market. Arranging the issue was BT Securities brokerage firm.

Two weeks ago, the Bacau municipality raised RON 35 million (some 9.72 million euros) in a bond issue arranged by Raiffeisen Capital&Investment (RCI), while on Wednesday the bond offer of the Timisoara municipality, arranged by BCR Securities, came to a close.

The Iasi municipality sold 1 million bonds worth RON 100 each paying an interest rate computed as an arithmetic mean of the 6-month ROBID and ROBOR inter-bank rates plus a 0.65-percent premium. The bonds mature in 20 years and 4 months, one of the largest maturation in Romania so far. This issue was the first installment of a RON 200 million (some 55.6 million euros) loan taken out by the Iasi municipality for financing projects of local interest.

The bonds traded by the Bacau municipality matures in 18 months and pay an interest rate computed as the arithmetic mean of the 6-month ROBID and ROBOR rates plus a 0.85-percent premium.

In the case of the Timisoara municipals, they are the last installment of a RON-140-million loan raised in five stages. The municipality has issued 300,000 bonds worth RON 100 each, equal to the face value. The interest rate paid for these bonds is 12.4 percent on the first coupon and the 3-month arithmetic mean of the ROBID and ROBOR inter-bank interest rates, plus a 0.1-percent for the remaining intervals.

There are 19 municipal bond issues currently traded on the Bucharest Stock Exchange (BVB), according to Ziarul financiar.

Sursa: http://www.rompress.ro

Tags: municipality bonds issue million interest bvb bcr

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