The Ministry of Finance announced on Thursday evening that on February 15, 2024, the second transaction on international financial markets was completed, with the launch of two tranches of bonds with maturities of 7 and 12 years, denominated in euros. The 12-year tranche represented Romania's inaugural green bond issuance.
The total value of the €4 billion bond issuance had a final subscription of over €14.8 billion with the participation of a total number of over 250 investors. The issuance has garnered impressive interest from investors, with their orders surpassing €17 billion during the transaction.
"I am pleased that Romania's first green bond issuance was a real success, marked by a series of records. This issuance involved a complex process, which included the development and evaluation of a solid framework for financing green projects, for which I want to congratulate my colleagues at the Treasury. I would highlight the extraordinary demand from institutional investors, the credit risk margins obtained reflecting even a greenium of 10bps, as well as the quality of these investors, with around 45% of investors in the green tranche being socially responsible/green mandate investors (ESG). In addition to diversifying the investor base for public debt, this issuance is a concrete step in our mission to achieve sustainable development goals, as well as to support projects with a positive impact on improving the quality of life of Romanians," said Minister Marcel Boloş.
According to the Ministry of Finance, the 12-year maturity represents the largest green tranche denominated in euros issued so far by an issuer from emerging markets (ESG debt instruments). Moreover, the transaction represents the largest green bond issuance denominated in euros made by an issuer from emerging markets. Lastly, the issuance was the largest transaction on Romania's international financial markets, and the final subscription obtained was the largest to date for our country.
"The volume attracted for the 7-year maturity tranche is €2 billion, at a yield of 5.394% and an interest rate of 5.375% per annum, and for the 12-year green tranche, the volume of €2 billion was attracted, at a yield of 5.734% and an interest rate of 5.625% per annum. The funds raised from this issuance were settled on February 22, 2024," the source stated.
