Romania’s largest natural gas producer Romgaz, which holds over half the domestic market, floated a €500mn five-year bond on the Bucharest Stock Exchange (BVB) on November 19.

The bond, issued in October through a private placement, is part of Romgaz’s strategy to raise €1.5bn for its projects, including the Neptun Deep offshore gas field it is developing with OMV Petrom.

The bond carries a 4.75% coupon and was priced at a 4.77% yield. According to Romgaz CEO Razvan Popescu, the subsequent drop in trading yields to below 4.5% reflects robust investor demand. 

“We issued the bonds at 4.77%, and this morning they were trading below 4.5%, demonstrating continued interest from investors and enhanced liquidity,” he commented at the BVB listing ceremony on November 19.

“Romgaz is a reference company in the Romanian economy and today [is] listing this bond issue on the BSE, the first in the company's history, which will finance a project of national importance, Neptun Deep,” said Adrian Tanase, CEO of the Bucharest Stock Exchange.

British investment fund manager Man GLG emerged as the largest investor in the placement, with the bond already listed on the Luxembourg Stock Exchange. Romgaz's decision to also list in Bucharest aims to boost the company's market visibility and liquidity ahead of potential future issues.

However, trading activity on the bonds may remain limited, given the profile of the investors. “These investors are generally ‘buy-and-hold’ entities, such as mutual and pension funds, which view a five-year tenor as short-term,” Popescu said.

The bond is the first issuance under Romgaz's Euro Medium-Term Notes (EMTN) programme, which allows for up to €1.5bn in total bonds. The timing of subsequent tranches will depend on financing needs and market conditions, with the next issue anticipated after mid-2024, according to Popescu.

As the company pursues its significant investment plans, including the Neptun Deep project, Popescu also emphasised the importance of adopting a “responsible” dividend policy.

Since December 2013, Romgaz has been part of the BVB’s reference index, BET, which tracks the 20 most actively traded companies on the exchange. It is also included in other key indices. In the BET-NG sectoral index, which focuses on energy and utilities companies listed on the BVB, Romgaz holds the third position with a weight of 16.43%. Romgaz is also part of the MSCI Frontier IMI (Investable Market Index), which targets frontier markets.

As of November 15, Romgaz had a market capitalisation of RON21.2bn. According to the company's nine-month financial report released on the same day, its consolidated net profit reached RON2.27bn, a 4.84% increase compared to the same period last year. However, its turnover for the first nine months of 2024 amounted to RON5.6bn, a 17% decline year-on-year. During this period, natural gas production rose by 5% compared to the corresponding months in 2023.

The bond listing process was carried out with the support of BT Capital Partners, part of Banca Transilvania Financial Group.