Raiffeisen Bank Romania will release an issue of ROL-denominated bonds worth several tens of millions of dollars on the domestic market in the second quarter of this year. The bank is now in talks with potential investors, especially foreign ones, to see if it should pursue a fixed or floating interest, James Stewart, vice-president of the bank told Ziarul Financiar.
The bonds will float on the Bucharest Stock Exchange (BSE) and the cash raised will be used to restore the balance between Raiffeisen's financing streams and loans. The issue will mature in two or three years and has no precise value set yet.
"As most of the banks in the system, we started granting loans (either for housing or other purposes) for longer and longer maturities, while the deposits, which should be our main stream of cash are still made for short term. We therefore need alternative funding sources, such as capital increases or bond issues with longer maturities," Stewart specified.
Raiffeisen is the second major bank in Romania besides Banca Romana pentru Dezvoltare (Romanian Development Bank - BRD) to announce plans to release ROL-denominated bond issues this year to fuel its lending business. Also Banca Comerciala Romana (Romanian Commercial Bank - BCR) in its turn will release 200 million euros' worth in bonds on the international market.
"We intend to achieve 60% asset growth to 1.6bn euros this year. We must also make sure we have the necessary financing sources to sustain this growth," Stewart says.
Raiffeisen Bank Romania is now undergoing a share capital increase by 45 million euros to approximately 220 million euros, following an inflow provided by the majority shareholder, Austrian Raiffeisen Group, which holds more than 90% in it.
Now that BRD has announced its bond issue might be worth several tens of millions of dollars, too, the Romanian capital market is in for an unprecedented demand for cash. Which is all the more true if other banks decide to take Raiffeisen and BRD's lead.
Will the Romanian institutional investors, such as insurance companies, financial investment companies (SIF) or mutual funds be able to stomach such a demand?
"The Romanian investors will play an important part, but we will mainly rely on foreign institutional investors. Unlike three or four years ago, the ROL-denominated assets have become attractive for foreign investors and we plan to take advantage of that," Stewart said. laurentiu.ispir@zf.to
