Romania Issues a Decade-Long Euro-Backed Bond for Households in Preparation for a Substantial Eurobond Redemption
Romania Introduces 10-Year Euro-Denominated Bond for Retail Investors
In July 2025, Romania launched its first 10-year euro-denominated government bond for retail investors, marking a strategic shift in the government's financing approach. This bond, part of the sixth edition of the Fidelis bond program, allows individuals to invest in government bonds in euros for the first time, offering attractive interest rates and tax-free returns.
The move comes amidst budgetary pressures and upcoming large Eurobond repayments starting in late 2025. Romania faces substantial debt maturities in foreign currency, putting pressure on public finances to secure liquidity and manage refinancing risks. By offering euro bonds to retail investors domestically, Romania can potentially lower borrowing costs, hedge currency risk, and improve debt investor base diversity.
The new bond issue, aimed at securing stable long-term financing directly from the population of Romania, offers a 6.5% coupon. This high rate reflects the government's efforts to tap into the savings of Romanian households, particularly those seeking long-term euro exposure.
The surge in interest for foreign currency instruments is attributed to ongoing concerns over RON stability and long-term inflation risks. The bond issue, which does not repeat the August Fidelis issuance mentioned earlier, is part of Romania's financing approach targeting retail investors.
The Ministry of Finance is seeking to hedge against external refinancing risks with the new bond issue. Romania is scheduled to begin repaying a series of major external loans starting on October 29, 2025. However, the exact maturity and interest repayment schedule for the new bond have not been specified.
The introduction of the new bond adds to the growing strain on the national budget, which is already under pressure from a deficit expected to remain above 6% of GDP in the near term. Domestic debt obligations, which are significantly larger and mostly denominated in lei, compound the challenge for the national budget.
In response, the Ministry of Finance has reduced interest rates for bonds denominated in the local currency and made deeper cuts for shorter-term euro-denominated bonds. Despite these measures, the new bond issue is expected to contribute to the government's efforts to manage large Eurobond debt maturing from late 2025 onwards under ongoing budgetary constraints.
[1] Ziarul Financiar, July 28, 2025. [2] Bloomberg, July 28, 2025. [3] European Central Bank, "Romania – External debt and liabilities", accessed July 29, 2025. [4] International Monetary Fund, "Romania: Selected Issues", accessed July 29, 2025. [5] Reuters, "Romania sells 2 billion euros of bonds as foreign investors return", June 17, 2025.
- The Ministry of Finance in Romania is introducing a 10-year euro-denominated government bond for retail investors, which is part of their strategic shift in financing approach, as the government aims to tap into the savings of Romanian households and potentially lower borrowing costs, hedge currency risk, and improve debt investor base diversity.
- The government of Romania is offering this bond to manage large Eurobond debt maturing from late 2025 onwards under ongoing budgetary constraints, as the country faces substantial debt maturities in foreign currency, putting pressure on public finances to secure liquidity and manage refinancing risks.
