Romania Sells EUR1.42B 1-Yr T-Bills At 4.25% Avg Yield

The ministry planned to sell EUR500 million at the Thursday auction.

Banks' offers amounted to EUR1.76 billion.

Thursday's loan equals almost 1.2% of the estimated gross domestic product for the whole of 2009, being the biggest sum ever attracted by Romania both on the domestic and foreign markets, excepting the agreements signed with international financial institutions.

The proceeds will be used to finance budget deficit and refinance the public debt, the ministry said.

This was the third euro-denominated debt sale this year. The ministry raised EUR447 million at a four-year treasury bonds auction mid August, and EUR793.8 million in three-year T-bonds on November 6. The average annual yield was 5.25% on both occasions.

In Romanian currency, the ministry sold over 59 billion lei (EUR1=RON4.2733) of state treasuries so far this year, against RON12.5 billion sold in the whole of 2008.

Romania, which has been run by a caretaker government since mid-October, was delayed further disbursements of a EUR20 billion multilateral aid package until a proper government is in place.

The eastern European country was scheduled to receive EUR1.5 billion from the International Monetary Fund and EUR1 billion from the European Commission by yearend.

Without the external funds to cover the country's budget deficit, the Finance Ministry had to turn to the domestic market to raise the money.

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