The state borrows another 400 million euros in August: a 3.90% coupon on the three-year bonds

In August the state is borrowing in euros as well, not only in lei. Through Order no. 1.050/2026, the Ministry of Finance approved the issue prospectuses for discount treasury certificates and coupon government bonds denominated in euros, with a total nominal value of 400 million euros. The order completes the programme for the month, after the 7.2 billion lei announced at the end of July, and it has the same stated purpose: financing the budget deficit, refinancing and early repayment of public debt.

Both issues are auctioned on the same day, 19 August 2026, and settled on 21 August. These are securities issued on the domestic market, administered by the National Bank of Romania, not on the external markets, where the state borrows through eurobond issues.

The difference between the two instruments is straightforward. A discount treasury certificate pays no interest along the way: it is bought below its nominal value and redeemed at the full value, and the gain is the difference. A coupon bond pays annual interest and returns the principal at maturity.

What it changes in practice

The first issue consists of discount treasury certificates, ISIN code ROY7I8D6C5F8, worth 100 million euros. The auction takes place on 19 August 2026, the issue date is 21 August 2026 and the maturity date is 28 June 2027, that is, 311 days.

The second consists of coupon government bonds, ISIN code ROMSXV88TOE9, worth 300 million euros, with an initial maturity of three years and a maturity date of 27 June 2029. The coupon rate is 3.90% per year, and the interest accrued at the issue date is 29.38 euros per security. The coupon is paid annually, on 27 June, starting in 2027 and ending in 2029.

The bond is not on its first day of life, and the figure that shows this is precisely the accrued interest. At a nominal value of 5,000 euros and a coupon of 3.90%, one year of interest means 195 euros, so the 29.38 euros per security correspond to a period of 55 days, that is, exactly the interval between 27 June 2026 and 21 August 2026. At settlement the buyer pays, on top of the price resulting from the auction, this accrued interest, which is recovered at the first coupon payment. The prospectus moreover expressly provides that the value of the issue may be increased through subsequent reopenings.

The third effect concerns those who want to buy. The nominal value of one security is 5,000 euros, for both issues, and each tranche of a bid must be at least 5,000 euros. Buying is done only through primary dealers, which submit bids both on their own account and on behalf of their clients, individuals and legal entities.

The fourth effect is the mechanism of non-competitive bids, the only practical gateway for an ordinary investor. Non-competitive bids may be submitted by individuals and legal entities, with the exception of credit institutions, as clients of primary dealers. They are accepted up to a share of no more than 25%, calculated for the certificates from the total value of the announced issue, and for the bonds from the total nominal value of the reference auction. The benchmark for execution differs as well: for the certificates, the weighted average level of the yield of the awarded competitive bids; for the bonds, the weighted average level of the price. In other words, whoever submits a non-competitive bid does not negotiate, but accepts the outcome of the auction.

The fifth effect concerns the timetable of the auction day. Bids are submitted to the National Bank of Romania on 19 August, between 10:00 and 12:00, and the auction session starts after that window closes. The result is established the same day and made public. Payment is made on the issue date, no later than 13:00 Romanian time, through the euro account of the National Bank of Romania in the TARGET2 system.

Finally, the state keeps its hands free. The order provides that, depending on financing needs and on the level of the yield resulting from the auction, the Ministry of Finance may increase, reduce or cancel the amount borrowed under a series. For the bonds, the value of the issue may be increased later through reopenings.

What has changed compared with the previous situation

The programme for August had already been announced, but only in lei. The July order set the auctions in the national currency; this one adds the euro component, published separately and with different settlement rules, because payment goes through TARGET2, the European payment system for the euro, and not through the domestic system in lei.

The second difference concerns where the securities can be traded after issue. The euro bonds carry a note referring to Order of the Minister of Economy and Finance no. 2.231/2008: the series can be traded simultaneously on the secondary market administered by the National Bank of Romania and on the regulated market of the Bucharest Stock Exchange. The discount treasury certificates do not carry that note.

The third difference is the chosen maturity. Both issues mature on a date in the second half of June, 28 June 2027 and 27 June 2029, which groups the state’s future payments in the same period of the year.

What has not changed is who can actually buy. Access remains indirect, through primary dealers, and the threshold of 5,000 euros per tranche keeps the euro securities out of reach for the small investor, unlike the government securities programmes for the general public, where the threshold is in the range of hundreds of lei.

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