EBRD issues inaugural bond in Romanian Leu

By EBRD  Press Office

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The European Bank for Reconstruction and Development has launched its first issue in Romanian Leu (RON) by issuing a RON 115 million fixed rate bond. The issue is the first ever bond to be launched simultaneously in the Romanian and the international markets.

The bond issue is part of the Bank’s strategy to assist in the development of the capital markets in Romania. As the first bond issue in Romania to benefit from recent changes to cross-border securities issuance in the EU, it should pave the way for other transactions. This issuance enables the Bank to access the domestic Romanian investor base, in addition to capturing demand for RON from the international investment community. “The further development of a domestic capital market will have long-term benefits for the Romanian economy”, said Claudia Pendred, EBRD Director for Romania.

The Bank’s RON 115 million bond has a 10-year maturity and pays a coupon of 11.25 per cent, with an issue price of 100 per cent. The issue is lead-managed by Société Générale. The bonds will be cleared through Clearstream, Euroclear and the Romanian Central Depositary. Applications will be made to list the bond on both the Bucharest Stock Exchange and the London Stock Exchange.

This RON bond builds on the Bank’s ongoing issuance programme in the currencies of its countries of operations. The EBRD has been active in local currency issuance across the region and particularly in Russia where it has now raised RUB 27.5 billion through bond issues.

Manfred Schepers, EBRD Vice President Finance, said “this issue reflects the importance of developing a domestic capital market in local currency. The need for deep domestic markets has been highlighted by the current crisis where an over-reliance on foreign currency debt has exacerbated instability.”
To date, the Bank has invested about €3.8 billion in 249 projects in Romania and helped mobilise a further €7.2 billion from external sources, resulting in total investments of over €11 billion.

Following are the terms and conditions of the issue:

Issuer: European Bank for Reconstruction and Development (EBRD)
Issue Amount: Romanian Leu 115 million
Maturity Date: 5 February 2019
Coupon: 11.25% annually every 5 February
Issue price: 100%
Lead Manager: Société Générale
Ratings: Aaa (Moody's), AAA (S&P), AAA (Fitch)
Listing: Bucharest Stock Exchange and London Stock Exchange

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