The Finance Ministry is trying to sell 400 million euros' worth of bonds in Bucharest today and sources on the market say that there are also talks for a new 'club loan' like that in July, given the serious shortage of cash the state is facing after the instalments of the foreign loan have been postponed.
The Finance Ministry's thirst for cash would lead to a club loan of at least 500 million euros, an option often discussed in recent weeks.
"There have been talks over a new club loan over the past weeks, and the first signs show it to stand at about 500 million euros. This time the maturity should be longer, of up to four years, given that banks will probably ask for a higher interest, of more than 5.25% a year. Nothing has been put in writing yet," a banker commented.
With the ongoing political crisis, Romania was unable to collect the one billion-euro tranche from the European Union and another 300 million euros from the World Bank. At the same time, no one knows for sure if the third instalment from the IMF, worth 1.5 billion euros, which should have been transferred in November, will come this year. Therefore, if it does not receive the money from the foreign lenders, the state has to borrow from the local market to be able to pay salaries and pensions.
"It is only natural considering that foreign markets are closed to an eurobond issue and the prospects of receiving the tranches of the foreign loan from the IMF and EU are uncertain," said another banker who chose to remain anonymous.
President Traian Basescu said on a radio show yesterday that he guaranteed that salaries and pensions would be paid in full in November and December, though not with the IMF's money but from domestic loans, which come at higher costs.
By resorting to a club loan, the Finance Ministry is doing the same thing it did in the second half of July
