Alina Oprea • 16 May, 2023 at 8:27 AM
Banca Comercială Română (BCR) has announced its debuts on the international capital market with a €700 million 4NC3 senior non–preferred green Eurobond issuance. The final order book at a re-offer of €1.75 billion is the largest senior issue in the history of any financial or corporate issuer in Romania. Proceeds from the Eurobond issue will be directed toward renewable energy projects, green mortgages, and green buildings. BCR's new bond issue is a first in the Romanian financial-banking market, being the largest corporate bond issuance in Romania. It is also BCR's eighth bond issuance and supports the bank's efforts in developing the Romanian capital market, as well as the professionalism of the team that coordinated and planned this launch.
BCR's new bond issue marks the bank's debut on the international capital markets and consists of 4NC3 senior non-preferred Eurobonds with a maturity of 4 years, with the possibility of early redemption after 3 years. The issue is to be listed on the Vienna and Bucharest Stock Exchanges, being also the first international green Eurobond issued by a Romanian bank. In addition, this issuance is part of BCR's journey in the direction of the ESG (Environmental, Social, and Governance) criteria, with the aim to build sustainable economic development by encouraging environmentally responsible behavior, through better governance and increased social involvement. Before the Eurobond, BCR printed in three past years amount of RON4.1 billion (€820 million) in bond issuances, being one of the most active issuers on the Bucharest Stock Exchange. This issue is expected to receive a Baa2 rating from Moody's (in line with the rating given to the Multi Issuer Bond Programme for this issue) and BBB+ from Fitch.
In the first hours after opening the order book reached over €1 billion, rising to over €1.9 billion at the close of the order book, in just a few hours, allowing a coupon of 7.625%, significantly reduced from IPTs of 8.00%-8.25%.
"BCR is the first bank in Romania to print a green Eurobond issue, and the trading process has marked some firsts in the European banking industry. These milestones confirm the recognition and trust BCR enjoys among investors, whether corporate or institutional, international, or local. In fact, this trust mandate is addressed to the entire BCR community, employees, and clients alike, anchored by the professionalism of the team coordinating the issuance. We have learned a great deal in the process, and we are honored to note the confidence of a significant number of investors in our responsible, forward-looking approach, but also in the determination with which we engage in projects aimed at sustainable economic development", said Sergiu Manea, CEO of Banca Comercială Română.
The order book registered a significant volume of €1.9 billion, well above the minimum issue size of €500 million. This increased the issued amount to €700 million. The final volume reflects our commitment to the market in terms of future issuance plans and our firm intention of building a relationship of trust with our investors.
With this issuance, BCR took another step forward towards compliance with the EU regulations on the minimum capacity that banks must have in order to absorb the losses, the Minimum Requirements of own funds and Eligible Liabilities (MREL), and MREL guidelines in line with targeted resolution strategy.