The Romanian Ministry of Public Finance returns to the capital market with three new issues of government bonds for the retail investors, following the success of the public sale offer (IPO) conducted in August. The new IPO in the Fidelis program will take place on the Bucharest Stock Exchange (BVB) between November 9th and 27th, when investors can subscribe government bonds in RON with a maturity of 1 and 3 years, and in EUR, with a maturity of 5 years.
“We promised the Romanians that we will try to come periodically with safe saving instruments for the population, liquid governmental instruments. I believe that these moments of crisis in health and the economy are an opportunity to show cohesion and a chance for the population to make safe and good investments, which will not be eroded in the coming years. The success registered in summer was a first proof that we did the right thing”, stated the Minister of Public Finance, Florin Citu.
“We are delighted that the Ministry of Public Finance has returned to the capital market with new government bond issues, after the success of the previous offer, in August, when the Ministry attracted a total of over 2 billion lei. Through this return, the Ministry of Public Finance strengthens the institution’s commitment to be a reliable partner for BVB and a friend for the development of the Romanian stock market. At the same time, the new offer proves that the capital market is a reliable mechanism for attracting financing by the State and by companies. We must remember that in the last almost two years we have witnessed the listing of almost 30 bond issues and the listing of 3 companies, and the financing rounds conducted at BVB have exceeded the value of 1.5 billion euros, which proves that there are money in the market and they can be accessed”, stated Radu Hanga, Chairman of the Board, Bucharest Stock Exchange.
The characteristics of these issues are presented in the table below:
|Criterion||RON issue 2021||RON issue 2023||EUR issue 2025|
|Maturity||December 4th, 2021||December 4th, 2023||December 4th, 2025|
|Yearly interest rate||3.5%||4%||1.85%|
|Offering period||November 9 – 27, 2020||November 9 – 27, 2020||November 9 – 27, 2020|
|Nominal value / government bond||RON 100||RON 100||EUR 100|
|Minimum subscription value||RON 5000||RON 5000||EUR 1000|
“Since the previous offer, in August, there was a high interest of Romanians in these government bonds for the population, which led to an increase in the number of investors active at BVB. This proves that Romanians are starting to be more interested in their money and how they can invest it. We must not forget that approximately 7 million Romanians are indirect investors on the Bucharest Stock Exchange, through privately managed pension funds. At the same time, deposits of the population in banks continue to grow. We are talking about almost 244 billion lei, money that are placed in deposits, at unattractive interest rates for investing savings. The more Romanians will understand that their money must be placed in securities, the sooner we will achieve the desired representation of the capital market in the Romanian economy”, said Adrian Tanase, Bucharest Stock Exchange CEO.
The issues target exclusively the natural investors, and the minimum subscription value is RON 5,000 for the RON issues, or EUR 1,000 for the EUR issues.
According to the Romanian legislation in force, the interests and capital gains from the holding and trading of government bonds issued by the Romanian State through the Ministry of Public Finance are non-taxable income.
The Government bonds will be offered in Romania exclusively to resident and non-resident individuals, except for persons who have not reached the age of 18 until the closing date of the offer inclusively. The intermediary syndicate of the offer includes: BTCP (Lead Manager) & Banca Transilvania, BCR, BRD. Also, subscriptions can be made through Eligible Participants, which represent any intermediary (other than BTCP, BCR and BRD) authorized by the Financial Supervision Authority (ASF), which is financial investment company or credit institution accepted as a participant in the trading system of the Bucharest Stock Exchange that signed the commitment regarding the observance of the conditions of the offer and the provisions of the issue prospectus and sent the commitment to the Lead Manager.
The allocation of the government bonds subscribed within the offer will be made on the date of allocation (November 27th, 2020), and the final number of government bonds offered will be established by the issuer in consultation with the intermediation syndicate. The orders related to the subscriptions allocated to investors based on the subscriptions validated by the members of the syndicate / Eligible Participants will be registered in the trading system of BVB dedicated to public offers (government bonds). The allocation of the government bonds by the intermediary syndicate together with the issuer is mandatory and binding on investors.
The date of the registration of trades corresponding to the Offer will be registered in the BVB’s system, respectively December 4th, 2020.