The listing of Cluj County Council bonds (CJC33E) took place after a private placement at the end of 2023, which involved the issuance of 756,800 non-convertible bonds, guaranteed and dominated in EUR. The bonds have a nominal value of EUR100 and variable interest (EURIBOR 6 months + 3.25% per annum), maturing in 2033, with an option of early redemption in 2029. The private placement was brokered by a consortium including BT Capital Partners, Alpha Bank Romania and Raiffeisen Bank. VMB Partners acted as financial advisor to the issuer.
Cluj County thus joins another four counties and 15 municipalities in our country that have listed bonds with the BVB. Those are Alba, Bihor, Hunedoara, Timis and the municipalities of: Timisoara, Bucuresti, Bacau, Focsani, Zalau, Slobozia, Iasi, Bistrita, Targu Mures, Orastie, Predeal, Alba Iulia, Oravita, Navodari, Siret.
“We are glad we have succeeded, together with out partners, in implementing this new investment instrument, which is unique in the Cluj administrative environment. Our satisfaction is all the greater, as the rating of Cluj County, as certified by international specialists, is at the maximum, A level, higher than Romania’s sovereign rating. This fact, compounded with the high bond issue value, makes me extremely confident that we shall manage to speed up the investment projects of our County Council. Today’s launch will strengthen Cluj’s position as a national leader in the development plan and change the face of this county through an ambitious, onging investment program aimed at local and national interest targets, on multiple vital infrastructure axes: health, education, culture, road network, sewarage and water supply system expansion, or waste recycling”, stated Alin Tise, President of Cluj County Council.
“Bucharest Stock Exchange is today reasserting its role in funding the development of Romania. We have demonstrated over the years that we are a solid partner for both the companies seeking finance for the development of their businesses, and for local public institutions, such as county councils or city halls, who wish to implement projects for their citizens so as to change their living environment for the better. The listing of Cluj County Council bonds kicks off the 2024 stock market year, a year we wish to be at least as good as 2023. We shall continue to stay close to all entrepreneurs and public institutions that wish to fund significant projects for the future. Congratulations to Cluj County Council for their decision and best of luck in implemented their targeted projects”, said Radu Hanga, President of the Bucharest Stock Exchange.
“We want the listing of this bond issue to convey a strong positive signal to other counties and municipalities in our country that they may use this funding mechanism in implementing local development projects. Cluj County is one of the counties in Romania that have a sound business environment, we already have names of important companies in the area listed on the stock exchange and we want to trust that this county can witness even stronger development, due to wide-ranging projects that can be supported by money raised from investors with the help of the capital market”, stated Adrian Tanase, CEO of the Bucharest Stock Exchange.
“After more than a decade, Cluj becomes the first Romanian county to issue bonds. Congratulations to the Cluj County Council, to brokers, and investors who understood the importance of developing public infrastructure using the capital market. Issuing bonds is the most economically appropriate and socially responsible way of supplementing the resources made available by EU operational programs and NRRP. We thank the ASF and the Ministry of Finance for their support in introducing municipal bonds among the priorities of the National Strategy for Capital Market Development, and we hope that other county councils and municipalities will take over this example of good practice in 2024”, stated Valentin Miron, CEO VMB Partners.
“At the end of last year, we put in a joint effort to promote and broker Cluj County’s first capital market financing. We are particularly proud of the interest shown by investors and of the result of the private placement, and now, at the start of 2024, we mark the public launch of this instrument. The support and confidence thus provided to Cluj County Council to continue and expand their investment program is an example worth following. We believe that this confirms a new successful initiative for the Cluj community and for the local capital market”, said Daniela Secara, CEO of BT Capital Partners.
“We appreciate that the local public authorities are reorienting themselves towards the capital market in order to ensure an optimal mix of founding sources in implementing their own investment projcets. The bond issue conducted by Cluj County was very well received by the investors, who can thus indirectly contribute to sustainable development of the region, and give a positive signal for the potential of such a funding instrument. We are glad of the opportunity to support the Cluj County Council in this process, together with our partners from the brokerage syndicate, the issuer consultant and the Bucharest Stock Exchange”, according to Nicoleta Ruxandescu Director of the Investments and Capital Markets Unit of Alpha Bank Romania.
“The listing of bonds issued by Cluj County on the Bucharest Stock Exchange is the final step in a process that started several months ago, which put the county authority on the map of Romanian institutional investors. We are delighted to stand beside Cluj CC in this important stage of its development as a responsible and transparent issuer of financial instruments, and we believe that this success will inspire other local authorities to access alternative funding sources in financing public interest projects. Congratulations to Cluj County and their team for their openness and involvement in this project!”, stated Iuliana Musat, Investment Banking Senior Director, Raiffeisen Bank Romania.
The funds raised following the placement are aimed to re-finance local public debt and co-finance local public interest investments of Cluj County Council. Local public interest investments are aimed to: modernize county roads included in the regional Transilvania Nord system, build offices for the inclusive education school center, modernize the emergency clinical hospital for children, as well as the hospitals in Cluj-Napoca Municipality, restore the historical monument of Banffy Castle.