Romania on Wednesday hit the market with a new issue of 2032 and 2039 euro-denominated bonds, for the second time this year, in an attempt to finance its budget deficit amid the political turmoil ahead of the presidential election, Bloomberg reports.
Romania is selling the shorter bonds with a spread of 335 basis points over midswaps and 400 basis points for the 14-year security, which is tighter than initial price guidance, a source familiar with the matter said.
The sale comes just before the rescheduled presidential election that triggered Romania's worse political crisis since the fall of communism and complicated government plans to narrow the deficit to 7% of economic output. The uncertainty centers around a potential victory for a far-right or an independent candidate who could advocate for a new ruling coalition.
The vote's outcome could have implications for investor confidence, the sustainability of the coalition government and its political capacity to implement fiscal consolidation, Fitch Ratings, which cut the outlook on Romania's sovereign credit score to negative in December, said in a report late on Tuesday.
Romania already raised 2.8 billion and $1.25 billion in euro- and dollar-denominated bonds in February, and analysts expect it to remain one of the biggest borrowers among central and eastern European nations with a plan to tap 13 billion from foreign markets this year, after raising a record 18 billion in 2024.
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