Green bonds of Reşita Municipality enter trading at BVB today

An issue of green bonds issued by the Municipality of Reşiţa, worth 8.83 million euros, enters trading today at the Bucharest Stock Exchange (BVB), according to an announcement by the operator of our capital market.

The securities, non-convertible and guaranteed, have a nominal unit value of 100 euros and a variable interest rate of EURIBOR 6M + 3.5% per annum, with payments to be made semiannually. The maturity of the bonds is ten years, in 2033.

"If the EURIBOR 6M rate will become negative, the annual coupon will automatically be calculated as equal to the margin, thus becoming fixed until the EURIBOR 6M returns to positive values, at which point it will return to the initial coupon calculation formula", it is mentioned in the admission to trading document.

According to the document, the principal will be repaid in five annual installments, in consecutive years, on the second quarter coupon payment date in the years 2029, 2030, 2031, 2032 and 2033. These installments represent 12% of the total value of the issue in year 2019, respectively 18% in 2030, 20% in 2031, 23% in 2032 and 27% in 2033. After each repayment, the nominal value of the bonds will decrease in proportion to the amounts repaid. The decrease will only occur if the bonds are not redeemed early.

"The net funds obtained by the issuer from the placement are intended for the co-financing of some investment objectives of local public interest of the Municipality of Reşita, which are the object of programs financed by the Regional Operational Program 2014-2020", it is stated in the admission to trading document.

Being green bonds, the bonds issued by the Municipality of Reşita will finance, in whole or in part, existing or future projects that will contribute to the reduction of the city's carbon emissions in the energy and transport sectors, the document also mentions.

The municipality of Resita currently has a long-term rating of BBB- from Fitch, a stable outlook and a standalone rating of bbb+.

The bonds, which were sold through a private placement brokered by BRK Financial Group, will trade under the symbol RES33E.