At the end of April, the Bucharest city raised RON2.2 billion (roughly EUR500 million) in four bond issues on various maturities, in its first local-currency bond issuance program.
“The local currency bond program mitigates forex and devaluation risk by switching its long-term funding from foreign to local currency and will also assist in building a capital market yield curve for municipalities,” the EBRD said.
“In the build up to the bond, the EBRD was involved in policy dialogue to support clearing and settlement reform. EBRD focused its support on the longer tenors where it envisaged demand would be weaker.”
The proceeds of the new bond issues will be used to refinance the City of Bucharest’s existing Eurobond, and will not be used to finance any specific investment projects, physical assets or activities, or new capital expenditure.
The bonds were listed on the Bucharest stock exchange last week.