Romania delaying the first sale of bonds denominated in euros initially planned for the fourth quarter until 2011

Romania plans to sell bonds denominated in euros in the first quarter, as part of the program three-year bonds worth 7 million euros ($ 9,200,000,000), Deputy Finance Minister Bogdan Dragoi said.

The Ministry of Finance will take the organizers of the program early next year, after the administration selected a group of law firms last week to advise on the sale, Dragoi said in an interview today in Bucharest.

Romania delaying the first sale of bonds denominated in euros initially planned for the fourth quarter until 2011 after resuming the search for legal counsel in an appeal against the selection process. The country plans to turn to international markets twice next year to help finance a budget deficit of 4.4 percent of gross domestic product in accordance with its international creditors, Dragoi said on 29 November.

The government is seeking funds in foreign markets after the demand dropped leu-denominated debt in the second half of this year due to a ceiling of self-imposed return of 7 percent. The ministry dropped the cap last month and has paid a yield to 7.3 percent, an increase of value added tax has increased expectations that inflation will accelerate.

Bond Program

The government, which appealed to the International Monetary Fund and the European Union for a ransom of 20 billion euros last year, wanted to raise at least 1 million in euro-denominated bond sale for the first time in the program EMTN, former Finance Minister Sebastian Vladescu said on 26 August.

The sales took place after the law firm challenged the results of an initial offer to select legal counsel. Selected ministry in Vienna, Erste Group Bank AG and Paris-based Societe Generale SA to arrange the sale.

Romania last tapped international markets in March, when it sold 1 million in five-year bonds with a coupon of five percent in the country's largest supply of debt. The bonds have fallen from the sale, the increased yield of 5.308 percentage points today, from 4.91 percentage points when sold.

The ministry has sold nearly 3 billion lei ($ 920 million) in treasury bonds denominated in leu-of lei 4.6 billion expected this month after leaving the lid of yield 7 percent. Average yields ranged from 6.88 percent to 7.17 percent, Dragoi said the government wants to shape a flat yield curve previously.

"It looks like a yield curve is forming for leu-denominated Treasury given the good results we've seen in past auctions," Dragoi said.