Romania taps foreign markets as public sector spending cuts reassure debt buyers

BUCHAREST, Feb 26 (Reuters) - Romania raised 3 billion euros ($3.54 billion) and $2 billion in its first Eurobond sale of 2026, Thomson Reuters IFR data showed, as recently approved public sector job cuts reassured investors despite a pending budget.

Romania sold 2.25 billion euros worth of 2033 Eurobonds at 210 basis points over mid-swaps, 750 million euros of 2044 paper at 295 basis points over mid-swaps and $2 billion of 2036 dollar bonds, data showed on Wednesday.

Since taking power last June, the coalition government has survived six no-confidence votes, mostly over tax hikes and spending cuts aimed at reducing the largest budget deficit in the EU and preserving Romania's investment-grade debt rating.

Late on Tuesday, it approved a long-delayed decree that will cut jobs and state spending across public administration before it sends a budget plan to parliament for approval next week.

The government must continue cutting the deficit from over 9% of GDP in 2024 to this year's target of 6.2%, narrowing it to the EU's 3% ceiling by the end of the decade.

Romania plans to use an array of non-market funding sources this year including EU recovery and defence funds to significantly reduce gross Eurobond issuance to 10 billion euros.

By comparison, it has issued roughly 16 billion euros worth of Eurobonds in 2025.

Romania's rating currently sits on the lowest rung of investment grade at S&P, Fitch and Moody's. All three have it on a "negative" outlook.

($1 = 0.8467 euros)