Friday, December 18, 2009

Romania sells less than planned in 3-yr T-Bonds

BUCHAREST, Dec 17 (Reuters) - Romania sold a smaller than planned 358 million lei ($122 million) in 3-year treasury bonds on Thursday, as buyers showed little interest in the finance ministry's self-imposed 10 percent yield cap.

The finance ministry, which had planned to sell 850 million lei, has said it will not go above a 10 percent yield for lei currency debt, which is well above government borrowing levels seen in the euro zone or Romania's better-off regional peers.

Some analysts have said buyers could find more attractive interest rates on the interbank market. However, others have argued that recent developments in politics would eventually drive rates lower.

Romanian President Traian Basescu nominated acting Prime Minister and close centrist ally Emil Boc on Thursday to stay on and form a new government, which could solve a months-long political crisis and revive IMF-led aid..

"The improvement in perception about Romania could have a significant positive impact on the long end of the curve. We continue to see rates lower," ING Bank in Bucharest said in a research note.

The finance ministry has sold a little over 63 billion lei in local currency bills and bonds so far this year, five times more than in 2008, as it struggles to plug a huge fiscal deficit. Series: R00912DBN076 Settlement date: 21/12/2009
Auction date 17/12/2009 19/11/2009 (pvs)
Avg. yield 10.00 10.00
Avg. accepted price 102.8979 102.9985
Highest accepted yield 10.00 10.00

Tail (highest accepted yield
minus the average yield) 0.00 0.00
Total bids 1.232 bln lei 1.359 bln lei
Alloted 358 mln lei 264 mln lei
Bid-to-cover ratio 3.4 5.2

Details of the auctions can be found on page. (Reporting by Luiza Ilie; Editing by Hugh Lawson)
($1=2.935 Lei) Keywords: ROMANIA DEBT/BONDS

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