The Finance Ministry announced it would auction off USD-denominated yield bearing T-bills worth $200 million and maturing in 2006 on Wednesday, April 9. The announcement was made only five days before the actual sale.
The potential investors therefore have very little time to do their sums. For those that have money to spend, the three-year USD-denominated bonds with $10,000 in par value can be a profitable placement.
Analysts say the auction to be held tomorrow could bring investors 4.5%-5% yearly yield. All this considering the yield for three-year USD-denominated securities is 2.48%-2.50% on the international markets and the risk premium for Romania is of about two percentage points.
Romania's eurobonds due in 2005 come with 4.8% yield.
The one-year banking deposits in dollars on the Romanian market bear 1% to 3.75% interest.
Considering the Finance Ministry has not signalled it is so strapped as to turn around the downward trend of the interests on T-bills, the analysts estimate the State can afford to reject bids for too high yields, in excess of 6%. The payment of the interest for the bonds in dollars is to be done on a yearly basis; the coupon will remain unchanged.
A second auction is supposed to be held under the same conditions next month.
The auction on Wednesday is open to both corporate bodies and individuals. The Romanian USD-denominated bonds may also be bought by non-residents.
The bids may be submitted through one of the fourteen banks authorised as dealers on the primary government securities market.
The plan to extend the one-year USD-denominated T-bills issues released in 2002 by a $400 million issue divided into two equal tranches was announced by the Finance minister last Tuesday. He did not provide any details as to the maturity of the new issue, though. Under the circumstances, the banks have too little time to notify their non-resident clients that might be interested.
This is also too little time for the domestic clients that keep most of their money in form of banking deposits to invest in Finance Ministry bonds.
"It looks like an issue sneaking out, which leads one to believe there's a sudden pressing need for cash," an analyst commented. The bonds remain interesting, however, if only for the banks, with some of them likely to bid yields below 4%.
The first three-year ROL-denominated issue launched last month is to be followed by a three-year foreign currency-denominated issue this week.
The Finance Ministry last May sold USD-denominated interest-bearing treasury certificates for individuals and corporate bodies separately.
Both types of certificates came with 5% a year in interest and were set to mature in one year.
razvan.voican@zf.ro
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