Sovereign Supply Glut Joined by Busiest Borrower in East Europe

Romania is back in the international debt markets as it ratchets up spending to boost infrastructure projects and Covid-relief efforts.

In its first foray this year, the east European nation is offering 12-year notes to yield about 225 basis points above midswaps and 20-year notes at a margin of about 265 basis points, according to a person familiar with the deal who asked not to be named as they are not authorized to speak publicly.

The region’s most frequent government borrower joins a glut of sovereign debt Wednesday, with Italy and Portugal both in the market to lock in relatively low yields with rates set to rise amid the economic recovery.

Romania’s government hired underwriters to line up investors in what is known as a syndicated deal, a formula that helped it raise more than $12 billion in 2020.

All told, Romania plans to raise about 7.4 billion euros ($8.8 billion) through Eurobonds this year as it targets spending on highway projects and aid to pandemic-hit industries.

“Considering they will have to tap international markets probably three times this year, it was about time for Romania to sell Eurobonds,” said Valentin Tataru, a Bucharest-based economist at ING Groep NV.

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