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Green municipal bonds issued by Reşita City Hall, listed on the stock exchange

6 March 2024

The green municipal bonds issued by the Reşita City Hall, which debuted on Tuesday at the Bucharest Stock Exchange (BVB), represent the second bond issue of a local public authority, after that of the Cluj-Napoca County Council last month, said BVB president Radu Hanga.

“We always talk about the relationship with our partners, with the stakeholders around the capital market. When we list our partners, we talk about brokers, we talk about issuers, listed companies. At the same time, we also talk about the authorities and institutions of the Romanian state. We have a relationship constant through the issuance of government securities that the state runs using the platform of the Bucharest Stock Exchange, making contact with capital holders in Romania. We are happy to see that this area of bonds issued by local authorities is starting to catch up or regain speed “, said Radu Hanga, at the official opening of the trading session on the occasion of the debut on the stock market of the first green municipal bonds issued by the Reşita City Hall, according to Agerpres.

The bond issue took place within a private placement, concluded in November of last year. The amount raised from investors was 8.8 million euros.

The funds obtained through the bond issue will be used for the co-financing of the project to reintroduce the electric tram in Reşita, respectively the renewal of the rolling stock of the transport operator (13 trams and 10 electric buses) and the development of the transport infrastructure in Reşita.

“The bonds have a nominal value of 100 euros, variable interest (Euribor + 3.5% per year) and mature in 2033. The coupon is payable semiannually, and the principal will be repaid in 5 annual installments (12% in 2029, 18% in 2030, 20% in 2031, 23% in 2032 and, respectively, 27% in 2033), and after each repayment, the nominal value of each bond will decrease proportionally”, BVB representatives claim.

The municipality of Reşita thus joins 15 other cities and 5 counties in Romania that currently have bonds listed on the BSE. It is about the counties of Alba, Bihor, Cluj, Hunedoara, Timiş and the cities: Alba Iulia, Bacău, Bistrița, Bucharest, Focşani, Iaşi, Năvodari, Oravița, Orăştie, Predeal, Siret, Slobozia, Târgu Mureş, Timişoara and Zalău.

The issuer has the early buy-back option set for 2029.

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