Investors accepted an average 5.09% yield in the auction for a 67-month maturing Romanian bond on Thursday, April 18, marking a significant decline from the 5.50% yield at the initial issue of the same bond on April 8, the central bank announced. In the re-opening of the bond this week, the Treasury drained RON 500mn – in line with the target and slightly more than the RON 400mn in the April 8 issue. The demand remains strong, exceeding the target issue by 2.7 times.
Romania’s Treasury visibly pursues a policy of extending the maturity of the debt on the local market with a view of diminishing the risks posed by the constant rolling over of short term bills. It also issued a 7-year benchmark bond in late March at a yield of 5.61% -- already lowered to 5.23% in the first re-opening on April 17. The yield for the 10-year bond was still at 5.81% in late March, up from 5.71% at its launch in late January – but issuing debt with 10-year maturity is still at the beginning, even if a small-sized 15-year issue was also launched last year and re-opened a couple of times [last time on December 10 at 6.98% yield].
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