Sunday, December 23, 2007

Romania picks three banks to manage eurobond issue

BUCHAREST, Dec 20 (Reuters) - Romania picked Greece's EFG Eurobank (EFGr.AT: Quote, Profile, Research) and Swiss banks UBS (UBSN.VX: Quote, Profile, Research) and Credit Suisse First Boston (CSGN.VX: Quote, Profile, Research) to manage a eurobond issue next year, the government said in a statement on Thursday. The finance and economy ministry wants to sell the 10-year issue worth at least 500 million euros ($718.4 million) no later than in February. It will be the European Union newcomer's first international issue since 2003. The ministry has said it plans to use proceeds from the issue to finance payments for other international debt maturing in the middle of 2008. But it is not clear what portion of the sale proceeds would be used to pay off debt.

Market conditions have deteriorated in the second half of the year after inflation shot up and the global liquidity squeeze has left the leu currency vulnerable, particularly as the country has a double-digit external shortfall.

Last month, ratings agency Standard & Poor's has revised Romania's outlook to negative from stable due to worries over a lack of policy response to the yawning current account deficit. (Reporting by Marius Zaharia; editing by David Christian-Edwards)

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