Romania's first issue of green bonds was a real success, being marked by a series of records, such as the extraordinary demand from the investment circles, according to the Minister of Finance, Marcel Bolos, agerpres reports.
On February 15, 2024, the Ministry of Finance carried out the second transaction on the international financial markets, by launching two tranches of bonds with maturities of 7 years and 12 years, denominated in euros. The 12-year tranche represented Romania's inaugural issue of green bonds.
According to a statement from the Ministry of Finance (MF), the total value of the bond issue, of four billion euros, had a final subscription of over 14.8 billion euros through the participation of a total number of over 250 investors. The issue aroused impressive interest from investors, their orders exceeding the value of 17 billion euros during the transaction.
The volume attracted for the tranche with a maturity of 7 years is 2 billion euros, at a yield of 5.394% and an interest rate of 5.375% per year, and for the green tranche with a maturity of 12 years, the volume of 2 billion euros was attracted, at yield of 5.734% and an interest rate of 5.625% per year. The funds obtained from this issue were settled on February 22, 2024.
According to the MF, the 12-year maturity represents the largest euro-denominated green tranche launched so far by an issuer from emerging markets (ESG debt financial instruments). Also, the transaction represents the largest issue of green bonds denominated in euros made by an issuer from emerging markets.
The bond issue, launched on February 15, is part of the external financing plan for the year 2024, through which the Ministry of Finance aims to ensure the financing needs from foreign markets for this year, as well as the consolidation of the financial reserve in foreign currency at the disposal of the State Treasury.
In the process of drawing up the Framework regarding green bonds, the Ministry of Finance benefited from technical assistance from the World Bank.
"As we navigate an era of pressing challenges, where the livability of our planet is challenged, and growing conflict and disparity are pressing, the role of sustainable finance has never been more important to support World Bank member countries. We are extremely pleased to have provided technical assistance to facilitate Romania's first green bond issue and look forward to working with the Government of Romania on the next steps of the process, such as allocation and impact reporting," said Anna Akhalkatsi, country manager of the World Bank for Romania.
The transaction was brokered by Citigroup Global Markets Europe AG, Este Group Bank AG, HSBC Continental Europe, J.P. Morgan SE and Societe Generale, Citigroup and HSBC also playing the role of structuring banks for the green tranche.
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