Fitch Rates Romania EUR1B Eurobond ‘BB+’

However, Fitch warns about risks related to the austere measures included in Romania's 2010 budget aimed at lowering the budget gap to 5.9% of the gross domestic product, including public wage freeze, according to a statement released Friday.

It said fiscal consolidation would need to continue beyond 2010 to sustain the economy's external adjustment and lessen the upward trend in public debt ratios.

Fitch forecasts Romania's general government debt (including guarantees) at 33% of GDP at end-2010, compared with 21.8% at end-2008.

Romania sold Thursday five-year euro-denominated bonds worth EUR1 billion at an annual yield of 5.17%, 268 basis points above the mid-swaps, in a heavily oversubscribed issue.

On February 2, Fitch upgraded its rating on the Romanian long-term debt to stable from negative, citing improved financial and economic conditions, after the International Monetary Fund resumed disbursements of a EUR13 billion loan deal.

Standard&Poor's followed suit shortly after and revised its outlook on Romania's rating to stable, while affirming its long- and short-term foreign currency sovereign credit ratings on the country at 'BB+' and 'B', respectively.

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