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EBRD bridges financing gap for city of Bucharest
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Local-currency loan equivalent to €115 million to refinance Bucharest’s maturing bonds
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Loan replaces earlier plans for new issuance as coronavirus outbreak derails markets
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EBRD now entirely focused on crisis response and recovery measures
The Romanian capital, Bucharest, is successfully addressing its financing needs with the help of a RON 555 million (€115 million equivalent) loan from the EBRD.
The three-year emergency facility will refinance the five-year tranche of the municipality’s 2015 bond programme, which matures on 4 May 2020. The EBRD loan replaces earlier plans by the city for a new bond issuance and offers flexibility to return to capital markets under improved market conditions.
Mark Davis, EBRD Regional Director for Romania and Bulgaria, said: “The EBRD’s flexible and swift response enables Bucharest, our longstanding partner, to successfully refinance its maturing bond programme. We are pleased to be able to continue our support for the city and its people and, despite adverse market conditions, to uphold investors’ confidence in Romania’s bond market and the Bucharest Stock Exchange.”
He added: “The EBRD remains committed to helping the city prepare for future bond placements, including green bonds.”
Gabriela Firea, Mayor of Bucharest, commented: “I am pleased that we have successfully completed this extremely difficult procedure at a delicate time for the financial market. I am aware that Bucharest is perceived as an important issuer on the Romanian municipal bond market and I would like to point out that we intend to return to the capital market, as soon as the market stabilises. Our thanks to the EBRD, our longstanding partner, for its involvement, efforts and support for Bucharest.”
The Bank is now entirely focused on helping the 38 countries where it invests to combat the economic impact of the coronavirus crisis. The EBRD stands ready to provide support worth €21 billion over the 2020-21 period.
The Bank is adapting and scaling up existing instruments and developing new initiatives to provide finance and policy support to help stave off the immediate economic threat of the virus. It is also working to prepare countries for the post-virus era and to safeguard their progress towards sustainable, fair and open market economies.
EBRD support includes short-term liquidity and working capital for existing clients, as well as trade finance and an emergency support programme for infrastructure providers. As the situation evolves, the Bank will also ramp up its local currency, capital markets and equity offers.
In Romania, where the EBRD is a major investor, the Bank focuses on financing infrastructure, boosting productivity and strengthening the financial sector. To date, the EBRD has invested almost €8.7 billion in the Romanian economy. In 2015, it was among the investors in the Bucharest bond programme.