Romania has launched its first 10-year euro-denominated government bond for retail investors, offering a 6.5% coupon, as part of the August Fidelis issuance, Ziarul Financiar reported on July 28.
The move comes as the government prepares for a series of large Eurobond repayments starting in late 2025, amid persistent budgetary pressures.
The Ministry of Finance has reduced interest rates by 5 basis points for bonds denominated in the local currency and made a deeper cut for shorter-term euro-denominated bonds, responding to strong recent demand for foreign currency instruments. Market analysts attribute the surge in interest to ongoing concerns over RON stability and long-term inflation risks.
The euro-denominated bond marks a strategic shift in the government’s financing approach, targeting retail investors seeking long-term euro exposure. It also reflects the growing need for hard currency financing to cover Romania’s widening fiscal deficit and to refinance existing public debt.
Romania is scheduled to begin repaying a series of major external loans starting on October 29, 2025. The first maturity is a EUR1.97 billion Eurobond issued in 2015, with EUR 540 million in interest already paid. In 2026, an additional EUR 4.3 billion in Eurobonds will mature, representing issues placed between 2016 and 2018 when global interest rates were significantly lower.
These repayments add to the growing strain on the national budget, already under pressure from a deficit expected to remain above 6% of GDP in the near term. Domestic debt obligations, which are significantly larger and mostly denominated in lei, compound the challenge.
With this new bond issue, the government aims to secure stable long-term financing directly from the population, bypassing volatile institutional markets. The Fidelis scheme has been in use since the COVID-19 pandemic to encourage household investment in government securities.
By offering a high coupon on long-term euro-denominated paper, the Ministry of Finance is seeking to tap into the savings of Romanian households while also hedging against external refinancing risks.
(Photo: Bursa de Valori Bucuresti on Facebook)
iulian@romania-insider.com
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