Bucharest City Hall lists bond issue on the Stock Exchange worth RON 555 million
Bucharest City Hall (PMB) listed a new bond issue (PMB31) on the Bucharest Stock Exchange (BVB) on Wednesday, May 14, with a total value of RON 555 million (EUR 108.7 million). It is the eighth issue of the Municipality of Bucharest listed on the stock exchange in the last 10 years, and was subscribed by 26 institutional investors in a private placement in April.
The 55,510 registered, non-convertible, unsecured bonds, denominated in RON, have a nominal value of RON 10,000 (EUR 2,000), a fixed interest rate of 8.47% and a maturity of 6 years, up to April 23, 2031.
The funds raised by PMB's current bond issue are intended to refinance the public debt of the Municipality of Bucharest arising from the bond issue maturing in May this year.
Currently, PMB has 3 other bond issues available for trading on the stock exchange: PMB32, PMB30 and PMB28.
“Through this new issuance of municipal bonds, we reaffirm not only Bucharest’s robust financial standing, but also our unwavering commitment to transparency, stability and continuity in the city’s development. The fact that the issuance was oversubscribed is a clear indication of the strong confidence investors place in the local administration,” said Nicusor Dan, general mayor of the Municipality of Bucharest.
The official also noted the administration’s seriousness and its commitment to stability.
"The last issuance made by the Municipality of Bucharest in April 2023 had a cost of 8.9%. The issuance they are doing now has a cost of 8.5%. [...] If we look at the financing cost for the Romanian state, two years ago the government bond yield was 7.4%, now it is 8.5%,” said Radu Hanga, president of the Bucharest Stock Exchange.
The Stock Exchange official also noted that the financing cost for the Bucharest City Hall, as opposed to that of Romania as a whole, decreased in the last two years.
“A lack of predictability in a certain context, for any entity, be it a company, a public authority, or a state, translates into a higher financing cost. If we put into context the evolution of the financing cost, in the case of the Romanian state, for example, with a public debt of EUR 200 billion, one additional percentage point in financing means EUR 2 billion annually in additional interest costs,” he added.
Bucharest city manager Lucian Judele, present at the BVB event marking the listing of the bonds, said that the capital generates a quarter of Romania’s economy.
“Bucharest has a huge long-term potential, and access to financing is essential for its development. Along with EU funds and the money that we receive - or do not - from the state, we must be aware of the stock exchange too,” he added.
Currently, municipal bonds of 5 counties and 16 cities in Romania are listed on the stock exchange. These are the counties of Alba, Bihor, Cluj, Hunedoara, Timis and the cities of Alba Iulia, Bacau, Bistrita, Bucharest, Focsani, Iasi, Navodari, Oravita, Orastie, Predeal, Resita, Siret, Slobozia, Targu Mures, Timisoara, and Zalau.
The brokerage consortium for the issuance of PMB bonds and the private placement was formed by Banca Comerciala Româna (BCR), as the originating intermediary, along with Alpha Bank Romania, BRD – Groupe Societe Generale (BRD), and Raiffeisen Bank, as intermediaries. Local pension and investment funds, along with banks, covered the entire bond. The offer was oversubscribed twice by the investors.
According to the Fitch rating agency, the Municipality of Bucharest has a BBB- (negative outlook) long-term debt rating. The standalone credit profile of the Municipality of Bucharest is “A” as of April 2023 and reconfirmed in April 2025.
According to statistics from 2023, the Municipality of Bucharest has a population of 1.7 million people (resident population), of which 1.1 million people are employees, over 135,000 active companies, a GDP of RON 427 billion.
(Photo source: BVB.ro)
