Obligation România 6.5% ( XS0371163600 ) en EUR

România

100 % ⇌

Roumanie

XS0371163600 ( en EUR )

6.5% par an ( paiement annuel )

18/06/2018 - Obligation échue

Prospectus brochure de l'obligation Romania XS0371163600 en EUR 6.5%, échue

50 000 EUR

1 500 000 000 EUR

La Roumanie est un pays d'Europe de l'Est membre de l'Union européenne et de l'OTAN, possédant une riche histoire, une culture diversifiée et une économie en développement, située à la croisée des chemins entre l'Europe centrale, l'Europe du Sud-Est et l'Europe de l'Est.

L'Obligation émise par România ( Roumanie ) , en EUR, avec le code ISIN XS0371163600, paye un coupon de 6.5% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 18/06/2018

ROMANIA
ACTING THROUGH THE MINISTRY OF PUBLIC FINANCE
EUR 750,000,000 6.50 per cent. Notes due 2018
To be consolidated with and form a single series with the issue of
EUR 750,000,000 6.50 per cent. Notes due 2018
issued on 18 June 2008

The issue price of the EUR 750,000,000 6.50 per cent. Notes due 2018 to be issued on 11 September 2012 (the "New Notes") of
Romania (the "Issuer") is 106.817 per cent. of their principal amount (plus accrued interest from 18 June 2012).
The New Notes are to be consolidated with and form a single series with the Issuer's EUR 750,000,000 6.50 per cent. Notes due
2018 issued on 18 June 2008 (the "Original Notes", together with the New Notes, the "Notes").
Unless previously redeemed or cancelled, the Notes will be redeemed at their principal amount on 18 June 2018.
The New Notes will bear interest from 18 June 2012 at the rate of 6.50 per cent. per annum payable annually in arrear on 18 June
each year commencing on 18 June 2013. Payments on the Notes will be made in Euro without deduction for or on account of taxes
imposed or levied by Romania to the extent described under "Terms and Conditions of the Notes - Taxation".
This Offering Circular does not comprise a prospectus for the purpose of Directive 2003/71/EC, as amended (the "Prospectus
Directive"). Accordingly, this document has not been and will not be submitted for approval to any competent authority within the
meaning of the Prospectus Directive and in particular the Luxembourg Commission de Surveillance du Secteur Financier (the
"CSSF"), in its capacity as competent authority for the purposes of the Prospectus Directive.
Application has been made for the New Notes to be admitted to listing on the official list and to trading on the regulated market of
the Luxembourg Stock Exchange which is a regulated market for the purposes of the Directive on Markets in Financial Instruments
2004/39/EC.
The Notes have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act") and are
subject to United States tax law requirements. The Notes are being offered outside the United States by BNP Paribas, Deutsche
Bank AG, London Branch, J.P. Morgan Securities plc and UniCredit Bank AG (the "Joint Lead Managers") in accordance with
Regulation S under the Securities Act ("Regulation S"), and may not be offered, sold or delivered within the United States or to, or
for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
The New Notes will be in bearer form and in the denomination of EUR 1,000 each. The New Notes will initially be in the form of a
temporary global note (the "Temporary Global Note"), without interest coupons, which will be deposited on or around 11
September 2012 (the "Closing Date") with a common safekeeper for Euroclear Bank, S.A./N.V. as operator of the Euroclear
System ("Euroclear") and Clearstream Banking, société anonyme, Luxembourg ("Clearstream, Luxembourg"). The Temporary
Global Note in respect of the New Notes will be exchangeable, in whole or in part, for interests in the permanent global note (the
"Permanent Global Note") in relation to the Notes, without interest coupons, not earlier than 40 days after the Closing Date upon
certification as to non-U.S. beneficial ownership. Interest payments in respect of the Notes cannot be collected without such
certification of non-U.S. beneficial ownership. The Permanent Global Note will be exchangeable in certain limited circumstances in
whole, but not in part, for Notes in definitive form ("Definitive Notes") in the denomination of EUR 1,000 each and with interest
coupons attached. See "Summary of Provisions Relating to the Notes in Global Form".

Joint Lead Managers

BNP PARIBAS
DEUTSCHE BANK
JPMORGAN
UNICREDIT BANK

7 September 2012

IMPORTANT NOTICES
This Offering Circular (the "Offering Circular") contains information provided by the Issuer in
connection with the Notes. The Issuer accepts responsibility for the information contained in this Offering
Circular and declares that, having taken all reasonable care to ensure that such is the case, the information
contained in this Offering Circular is, to the best of its knowledge, in accordance with the facts and
contains no omission likely to affect its import.
This Offering Circular does not constitute a prospectus pursuant to Part II of the Luxembourg law on
prospectuses for securities (loi relative aux prospectus pour valeurs mobilières) dated 10 July 2005 (the
"Luxembourg Prospectus law") nor a simplified prospectus pursuant to Chapter 2 if Part III of the
Luxembourg Prospectus Law, nor a prospectus pursuant to Romanian Law no. 297/2004 on capital
market. Accordingly, this Offering Circular does not purport to meet the format and the disclosure
requirements of the Prospectus Directive, as amended, and Commission Regulation (EC) No 809/2004, as
amended, and it has not been and will not be, submitted for approval to any competent authority within
the meaning of the Prospectus Directive and in particular the Commission de Surveillance de Secteur
Financier, in its capacity as competent authority under the Luxembourg Prospectus Law.
The New Notes will be issued on the terms set out herein under "Terms and Conditions of the Notes" (the
"Conditions").
The Issuer has confirmed to the Joint Lead Managers that this Offering Circular contains all information
which is (in the context of the issue, offering and sale of the Notes) material; that such information is true
and accurate in all material respects and is not misleading in any material respect; that any opinions,
predictions or intentions expressed herein are honestly held or made and are not misleading in any
material respect; that this Offering Circular does not omit to state any material fact necessary to make
such information, opinions, predictions or intentions (in the context of the issue, offering and sale of the
New Notes) not misleading in any material respect; and that all proper enquiries have been made to verify
the foregoing.
No person has been authorised to give any information or to make any representation not contained in or
not consistent with this Offering Circular or any information supplied by the Issuer or such other
information as is in the public domain and, if given or made, such information or representation should
not be relied upon as having been authorised by the Issuer or any Joint Lead Manager.
Neither the Joint Lead Managers nor any of their respective affiliates have authorised the whole or any
part of this Offering Circular and none of them makes any representation or warranty or accepts any
responsibility as to the accuracy or completeness of the information contained in this Offering Circular.
Neither the delivery of this Offering Circular nor the offering, sale or delivery of any Note shall, in any
circumstances, create any implication that the information contained in this Offering Circular is true
subsequent to the date hereof or the date upon which this Offering Circular has been most recently
amended or supplemented or that there has been no adverse change, or any event reasonably likely to
involve any adverse change, in the prospects or financial or trading position of the Issuer since the date
thereof or, if later, the date upon which this Offering Circular has been most recently amended or
supplemented.
The distribution of this Offering Circular and the offering, sale and delivery of the New Notes in certain
jurisdictions may be restricted by law. Persons into whose possession this Offering Circular comes are
required by the Issuer and the Joint Lead Managers to inform themselves about and to observe any such
restrictions. For a description of certain restrictions on offers, sales and deliveries of Notes and on the
distribution of this Offering Circular and other offering material relating to the Notes, see "Subscription
and Sale". In particular, Notes have not been and will not be registered under the United States Securities
Act of 1933 (as amended) (the "Securities Act") and are subject to U.S. tax law requirements. Subject to
certain exceptions, Notes may not be offered, sold or delivered within the United States or to U.S.
persons.
This Offering Circular does not constitute an offer or an invitation to subscribe for or purchase any Notes
and should not be considered as a recommendation by the Issuer, the Joint Lead Managers or any of them
that any recipient of this Offering Circular should subscribe for or purchase any Notes. Each recipient of
this Offering Circular shall be taken to have made its own investigation and appraisal of the condition
(financial or otherwise) of the Issuer. Each investor contemplating purchasing any Notes should make its

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own independent investigation of the financial condition and affairs, and its own appraisal of the
creditworthiness of the Issuer, including consultation with its tax, legal and financial advisors as it deems
necessary.
The Notes will be rated Baa3, BB+ and BBB-, respectively by Moody's Investor Services Ltd
("Moody's"), Standard & Poor`s Credit Market Services Europe Limited ("S&P") and Fitch Ratings
Limited ("Fitch").
In this Offering Circular, unless otherwise specified, references to a "Member State" are references to a
Member State of the European Economic Area, references to "U.S.$", "U.S. dollars" or "dollars" are to
United States dollars, references to "RON" and "Leu" are to Romanian New Leu, references to "EUR",
"Euro" or "euro" are to the single currency introduced at the start of the third stage of European
Economic and Monetary Union pursuant to the Treaty on the Functioning of the European Union, as
amended.
In connection with the issue of the Notes, Deutsche Bank AG, London Branch (the "Stabilising
Manager") (or persons acting on behalf of the Stabilising Manager) may over allot Notes or effect
transactions with a view to supporting the price of the Notes at a level higher than that which might
otherwise prevail. However, there is no assurance that the Stabilising Manager (or persons acting on
behalf of a Stabilising Manager) will undertake stabilisation action. Any stabilisation action may begin
on or after the date on which adequate public disclosure of the terms of the offer of the Notes is made
and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the issue
date of the Notes and 60 days after the date of the allotment of the Notes. Any stabilisation action or over
allotment must be conducted by the Stabilising Manager (or persons acting on behalf of the Stabilising
Manager) in accordance with all applicable laws and rules.

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CONTENTS

Page
RISK FACTORS .......................................................................................................................................... 1
TERMS AND CONDITIONS OF THE NOTES ....................................................................................... 14
SUMMARY OF PROVISIONS RELATING TO THE NOTES IN GLOBAL FORM ............................. 24
USE OF PROCEEDS ................................................................................................................................. 26
DESCRIPTION OF ROMANIA ................................................................................................................ 27
TAXATION ............................................................................................................................................. 137
SUBSCRIPTION AND SALE ................................................................................................................. 139
GENERAL INFORMATION .................................................................................................................. 140

RISK FACTORS
Risks Relating to Romania
An investment in a developing country such as Romania is subject to substantially greater risks than
an investment in a more developed country
An investment in a country such as Romania, which joined the European Union ("EU") in 2007 but is still
an emerging market, is subject to substantially greater risks than an investment in a country with a more
developed economy and more developed political and legal systems. Although progress has been made in
reforming Romania's economy and political and legal systems, the development of Romania's legal
infrastructure and regulatory framework is still ongoing. As a consequence, an investment in Romania
carries risks that are not typically associated with investing in more mature markets. Accordingly,
investors should exercise particular care in evaluating the risks involved and must decide for themselves
whether, in light of those risks, such investment is appropriate. Generally, investments in developing
countries, such as Romania, are only suitable for sophisticated investors who can fully appreciate the
significance of the risks involved.
In addition, international investors' reactions to the events occurring in one country sometimes appear to
demonstrate a "contagion" effect, in which an entire region or class of investment is disfavoured by
international investors. Therefore, investment in Romania's sovereign securities could be adversely
affected by negative economic or financial developments in other countries. There can be no assurance
that conditions resulting from any crises similar to the global financial and economic crisis that started in
2008, the ongoing sovereign debt crisis or the recent political turmoil in other countries in Europe and the
Middle East will not negatively affect the economic performance of, or investor confidence in,
developing markets, including Romania.
Political and economic uncertainty
Romania has undergone major changes during its recent history. Many political and economic reforms
have taken place but Romania's economy still has a number of structural weaknesses. These include
reliance on industrial sector exports and an imbalance of exports compared to imports, each of which may
affect Romania's creditworthiness.
Against the backdrop of austerity measures taken by the Romanian Government in 2010-2011 to counter
the effects of the global financial and economic crisis, daily street protests took place in the Romanian
capital Bucharest and in other important cities in January 2012. These protests were not dissimilar to
protests occurring in other EU countries that have undertaken structural reform programmes. The
protesters demanded, among other things, the resignation of the Government formed by the Democrat
Liberal Party ("PD-L") and its political partners and early elections. The Social Liberal Union ("USL")
came to power in May 2012 following a parliamentary vote of no confidence of the then PD-L
Government and, against the backdrop of increasing political tension between the ruling USL and the
country's President, Mr Traian Basescu, in July 2012, USL successfully replaced dignitaries in key public
functions (such as the presidents of the Parliament's Chambers and the Ombudsman). At the same time,
the Government passed emergency ordinances limiting the powers of the Constitutional Court in matters
concerning the impeachment of the country's President and amending referendum laws, although
following the strong reaction of the European Commission, the United States and several European
countries, the Romanian Parliament further amended these emergency ordinances, restoring the powers of
the Constitutional Court and reverting to the previous quorum required for referendum validation. These
actions culminated in the impeachment of President Basescu by the Romanian Parliament on 6 July 2012,
which was subject to a popular referendum, that took place on 29 July 2012. However, the referendum
was subsequently declared invalid due to lack of legal quorum. Traian Basescu resumed his functions on
28 August 2012, taking office from Crin Antonescu who acted as interim president during the period of
President Basescu's suspension (see "Description of Romania Overview - Political System - Political
and economic uncertainty").
Should the current domestic political turmoil continue or intensify, this may affect policy making, slow
down Romania's economic development and institutional reforms, test Romania's ability to reach the
objectives set through its agreements with international financial institutions and place additional
depreciating pressures on Romania's national currency and weaken Romania's ability to access
international markets to finance its needs.

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Parliamentary elections are currently scheduled for the second half of 2012. If these elections result in a
different party or coalition forming a new government, there can be no assurance that the new
government would continue the current Government's strategy for addressing those structural weaknesses.
Even if the current Government programme continues, the reforms as well as the ongoing adjustment and
fiscal consolidation measures that the Romanian authorities have undertaken in connection with financing
agreements with the IMF and the European Commission (the "EC") could result in increased social
pressures or an erosion of political support in the future, making further reforms more difficult.
Risks relating to global events
Since mid-2007 and continuing into 2009, the global economy experienced a significant downturn, the
effects of which have continued to a considerable degree until the present. In response to this global
financial crisis, governments in the United States, Europe and elsewhere have implemented (and continue
to implement) significant rescue packages, which have included, amongst other things, the
recapitalisation of banks through state purchases of common and preferred equity securities, the state
guarantee and purchase of certain forms of bank debt, purchase of distressed assets from banks and other
financial institutions by the state, the purchase of sovereign debt by central banks, and the provision of
guarantees of distressed assets held by banks and other financial institutions by the state. Despite these
actions, the volatility and market disruption in the global banking and other economic sectors have
continued to a degree unprecedented in recent history.
Romania has recently experienced some contraction in its economy and other adverse economic and
financial effects as a result of the global financial crisis, including pressure on profitability due to
compressed margins and rising credit impairments, a crisis in the real estate sector and limited access to
international capital markets. For example, gross domestic product ("GDP") declined by 1.6 per cent. in
2010 as compared to 2009 and 6.6 per cent. in 2009 as compared to 2008, before increasing by 2.5 per
cent. in 2011 as compared to 2010. Due to these and other pressures resulting from the global economic
crisis, Romania recorded budget deficits of 6.5 per cent. and 4.4 per cent. of GDP in 2010 and 2011
(calculated in cash terms), respectively (see "Description of Romania--The Romanian Economy").
In 2010, a financial crisis emerged in Europe, triggered by high budget deficits and rising direct and
contingent sovereign debt in Greece, Ireland, Italy, Portugal and Spain, which created concerns about the
ability of these EU "peripheral" states to continue to service their sovereign debt obligations. These
concerns impacted financial markets and resulted in high and volatile bond yields on the sovereign debt
of many EU nations. Despite the creation of a joint EU-IMF European Financial Stability Facility in May
2010, assistance packages to Greece, Ireland and Portugal, and announced plans in the summer of 2011 to
expand financial assistance to Greece, uncertainty over the outcome of the EU governments' financial
support programmes and worries about sovereign finances persisted and, notwithstanding increased
purchases of sovereign bonds by the European Central Bank and measures taken by other central banks to
enhance global liquidity, ultimately spread from "peripheral" to "core" EU member states during the latter
part of 2011. Market concerns over the direct and indirect exposure of European banks and insurers to
the EU sovereign debt further resulted in a widening of credit spreads and increased costs of funding for
some European financial institutions. In December 2011, European leaders agreed to implement steps
(and continue to meet regularly to review, amend and supplement such steps) to encourage greater long
term fiscal responsibility on the part of the individual member states and bolster market confidence in the
Euro and European sovereign debt; however, such proposed steps are subject to final agreement (and in
some cases, ratification and/or other approvals) by the EU member states that are party to such
arrangements and thus the implementation of such steps in their currently-contemplated form remains
uncertain, and even if such steps are implemented, there is no guarantee that they will ultimately and
finally resolve uncertainties regarding the ability of Eurozone states to continue to service their sovereign
debt obligations. Further, even if such long term structural adjustments are ultimately implemented, the
future of the Euro in its current form, and with its current membership, remains uncertain.
Risks and ongoing concerns about the debt crisis in Europe, as well as the possible default by, or exit
from the Eurozone of, one or more European states and/or the replacement of the Euro by one or more
successor currencies, could have a detrimental impact on the global economic recovery, sovereign and
non-sovereign debt of European countries and the financial condition of European and other financial
institutions, including the Issuer. In the event of any default or similar event with respect to a sovereign
issuer, some financial institutions may suffer significant losses for which they would require additional
capital, which may not be available. Market and economic disruptions stemming from the crisis in
Europe have affected, and may continue to affect: the inflow of capital for the purposes of investment;

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consumer confidence levels and spending; bankruptcy rates; levels of incurrence of and default on
consumer debt; and home prices, among other factors. There can be no assurance that the market
disruptions in Europe, including the increased cost of funding for certain government and financial
institutions, will not spread, nor can there be any assurance that future assistance packages will be
available or, even if provided, will be sufficient to stabilise the affected countries and markets in Europe
or elsewhere. The possible exit from the Eurozone of one or more European states and/or the
replacement of the Euro by one or more successor currencies could cause significant market dislocations
and lead to adverse economic and operational impacts that are inherently difficult to predict or evaluate,
and otherwise may have potentially materially adverse impacts on the Issuer.
The current economic crisis in the Eurozone could disrupt Romania's trade balance, which is heavily
reliant upon intra-EU trade. For the year 2011, 71.1 per cent. of Romania's (FOB) exports and 73.2 per
cent. of Romania's (FOB) imports were attributable to intra-EU trade, Romania's main EU trade partners
being Germany, Italy, France and Hungary (see "Description of Romania Foreign Trade and Balance of
Payments"). Therefore, a decline in trading activities within the EU as a result of the Eurozone crisis
could adversely affect Romania's trade balance and negatively affect its economy. Concerns regarding
the Eurozone crisis have also led to significant increases in secondary market yields for sovereign debt of
both directly and indirectly affected countries in 2010 and 2011. This uncertainty has also led to general
market volatility, reduced sovereign credit ratings in certain instances, and significant exchange rate
volatility.
There can be no assurance that global economic events or events in countries with which Romania has a
trading or investment relationship will not adversely affect Romania's economy and that such events will
not adversely affect Romania's ability to raise capital in the international debt markets in the future.
Prospective investors should ensure that they have sufficient knowledge and awareness of the global
financial crisis, the Eurozone crisis and the economic situation and outlook as they consider necessary to
enable them to make their own evaluation of the risks and merits of an investment in the Notes. In
particular, prospective investors should take into account the current uncertainty as to how the global
financial crisis, the Eurozone crisis and the wider economic situation will develop over time and how they
will affect the Romanian economy.
The Romanian banking sector has a high level of foreign currency denominated loans, which could
result in the Romanian banking system experiencing additional stress due to a potential increase in
non-performing loans, which could have a material adverse effect on the Romanian economy
Several Eastern European countries, including Romania, witnessed a notable increase in foreign currency
denominated loans over the last decade as borrowers sought lower interest rates in foreign currency
denominated loans, particularly euro denominated loans. In Romania, this is in part a consequence of the
country's significant foreign trade activities with its European area partners, the large presence of EU
based companies and banks in Romania and the country's anticipated adoption of the euro. A depreciation
in the exchange rate of Leu against the euro might have contributed to the deterioration in the quality of
credit portfolios in the banking system, as it became more expensive for Romanian borrowers to acquire
foreign-currency denominated loans and some of the borrowers of euro denominated loans have
experienced difficulties servicing their loans.
There can be no assurance that the measures which the National Bank of Romania ("NBR") has
implemented to rebalance the currency composition of new loans in favour of Leu denominated loans,
including tighter rules on foreign currency lending by Romanian banks, will yield the expected results in
stemming the growth of foreign currency denominated loans. The growth of non-performing foreign
currency loans could, in turn, contribute to a worsening of banks' asset quality (non-performing loans
reached 16.8 per cent. in June 2012 as compared to 14.3 per cent. at the end of 2011 and 11.9 per cent. at
the end of 2010 see "Description of Romania--Monetary and Financial System--Banking System--
Current Condition of the Banking Sector" for further information), and may contribute to a decision by
banks to exercise even more prudence in lending to domestic businesses. This stagnation of credit
conditions within Romania is likely to have a negative effect on Romania's GDP growth if it continues.

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The high level of foreign ownership in the Romanian banking system makes it vulnerable to disruption
as a result of internal or external factors
The difficult external environment poses a challenge to financial stability in Romania. The world
economy could be affected by a slower growth rate in developed economies in particular. Moreover, the
fallout from the sovereign debt crisis via contagion in some countries in the EU and in the United States
of America, along with the lingering vulnerabilities in certain banking sectors in Europe, may harm the
economic growth in Romania and the capacity of the banking sector to access financing, as well as
undermining banks' asset quality.
The Romanian banking sector is dominated by subsidiaries of banks incorporated in Eurozone countries,
with a relatively large proportion of assets being held by Austrian (38 per cent. of the total net assets of
credit institutions in Romania), French (13 per cent.) and Greek (13 per cent.) banks (see "Description of
Romania Monetary and Financial System Banking System Current Condition of the Banking
Sector"). As at 30 June 2012, foreign banks owned approximately 81.2 per cent. of banks' assets in
Romania. Foreign banks may rebalance their global loan portfolio in a manner adversely affecting
Romania as a result of events related or unrelated to Romania, including as a result of the ongoing
economic turbulence in the Eurozone and sovereign debt markets. In addition, foreign banks may dispose
of, decrease new funding to or refinance the funding to their subsidiaries operating in Romania due to
actual or perceived deterioration in asset quality, particularly in the event of a weaker than expected
economic performance. As a result of these or other factors, or other potential shocks, foreign banks may
revise their business strategies in, or relating to, Romania and in particular their decision to fund their
subsidiaries in Romania which in turn would impact the ability of those subsidiaries to lend in Romania.
This may lead to, among other things, depleted capital in the event of increased economic stress and Leu
depreciation. Resulting balance sheet mismatches may negatively affect the Romanian economy and, as a
result, have an adverse effect on Romania's capacity to repay principal and make payments of interest on
the Notes.
To provide protection for the Romanian banking system, Government Ordinance 1/2012 amending and
supplementing several pieces of legislation on credit institutions has been adopted in order to set up a
"bridge bank" to temporarily take over the operations of distressed banks which pose a threat to financial
stability in Romania. Other backstop measures are also available, mainly consisting of private sector
solutions (including purchases and assumptions by healthy banks of loan portfolios and/or deposit
portfolios of troubled banks). However, there can be no assurance that global economic events will not
adversely affect Romania's economy and its ability to raise capital in the external debt markets in the
future.
There can be no assurance that Romania's credit rating will not change
The long-term foreign and domestic currency debt of Romania is currently rated BB+ (Outlook Stable) by
S&P, Baa3 (Outlook Negative) by Moody's and BBB-/BBB (Outlook Stable) by Fitch. There can be no
guarantee that Romania will not experience credit downgrades. A deterioration in key economic
indicators or the materialisation of any of the risks discussed herein may contribute to credit rating
downgrades which could result in a sub-investment grade rating of the Notes. In turn, any adverse
changes in an applicable credit rating could adversely affect the trading price for the Notes. In addition, a
sub-investment grade rating could adversely affect Romania's ability to refinance existing indebtedness,
finance its deficit and could affect payment of principal and interest under the Notes.
Many issuers have been subject to rating downgrades in recent weeks. A credit rating is not a
recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal
at any time by the assigning rating agency. Any adverse change in Romania's credit rating could
adversely affect the trading price of the Notes.
The infrastructure in Romania is underdeveloped, and Romania may experience difficulties in
financing and developing infrastructure successfully
Compared to Western Europe, infrastructure in Romania, particularly the transportation system, is
underdeveloped. Romania currently has plans to undertake various development projects to improve
infrastructure in the country. Various financing plans have been proposed and attempted to further
infrastructure development, including the use of public private partnerships ("PPPs"). Romania also
funds infrastructure development using EU non-reimbursable funds.

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However, the funding and construction of infrastructure has been challenging. For example, whereas PPP
projects have frequently been used in other countries in the European Union for various investment
objectives, Romania has not, to date, successfully undertaken a development project using PPPs. Several
attempts have been made in Romania in the past to launch PPP projects, but the attempts have failed
during contract negotiation, due to the lack of a proven legal framework governing this field, the lack of
experience of the public authorities that initiate PPP projects, and the difficulty of completing PPP
projects.
There can be no guarantees that infrastructure projects will be financed or constructed successfully, and
any failure or delays in developing infrastructure projects in Romania may slow the growth in the
Romanian economy.
Delays in the reform of state-owned enterprises may hamper economic growth
The World Bank, EU and IMF noted in their April-May 2012 quarterly Review on Romania's Economic
Programme that structural reforms, including the preparation of plans to privatise a number of state-
owned enterprises and the introduction of private management in such enterprises, have proceeded
unevenly. Structural reforms are expected to continue, although the risk of delays and setbacks,
particularly of a political nature, is high. This could negatively impact improvements in the efficiency of,
and the attractiveness of investing in, Romania's economy and, ultimately, adversely affect the trading
price of the Notes.
Balance of Payments
Although the trade deficit has continued to narrow in 2011, reaching 5.5 per cent. of GDP, exports are
still substantially dependent on imported inputs. Compared to the EU average, Romania's exports still
exhibit a sub-optimal structure in terms of value added and are still constrained by poor infrastructure.
Romania's export market share, albeit rising after EU accession, has remained relatively low. Its rise has
relied almost entirely on price competitiveness, whereas non-price competitiveness recorded modest
headway.
The current account deficit registered a highly significant adjustment during 2009, reaching 4.2 per cent.
from 11.6 per cent. of GDP in 2008 (and levels between 10.4 per cent. and 13.4 per cent. in 2006-7.). It
remained low at 4.4 per cent. of GDP in both 2010 and 2011. In addition, approximately 70 per cent. of
Romania's exports are made within the EU. A slow economic recovery of EU member states may
negatively impact Romania's exports and thus the trade deficit, as well as having a negative impact on the
amount of foreign investment into Romania.
Exchange Rates and Inflation
The RON is subject to a managed-floating exchange rate regime, whereby the value of the RON against
foreign currencies is determined in the interbank foreign exchange market. The ability of the NBR to
limit volatility of the RON is contingent on a number of economic and political factors, including the
availability of foreign currency reserves and foreign direct investment inflows, as well as developments in
market sentiment and investors' risk aversion in the wake of the global economic crisis. In December
2009, against the same period of the previous year, the RON depreciated on average against the euro by
7.3 per cent. in nominal terms and by 2.9 per cent. in real terms. Against the U.S. dollar the RON
appreciated by 0.3 per cent. in nominal terms and by 5.0 per cent. in real terms. During 2010, the RON
depreciated against the euro by 1.6 per cent. in nominal terms, which corresponds to an appreciation in
real terms of 6.3 per cent., and against the U.S. dollar, it depreciated by 10.7 per cent., which corresponds
to a depreciation of 3.6 per cent. in real terms. In 2011, the RON depreciated against the euro by 0.8 per
cent. in nominal terms, while in real terms it appreciated by 2.3 per cent., and the RON depreciated
against the U.S. dollar in nominal terms by 1.3 per cent., while in real terms it appreciated by 1.8 per cent.
In August 2012 (up to 23 August and compared to December 2011, the RON depreciated against the euro
by 4.6 per cent. in nominal terms, with the depreciation coming to a halt in early August, and by 10.5 per
cent against the U.S. dollar (see "Description of Romania Monetary and Financial System Exchange
Rate Policy"). A significant depreciation of the RON could adversely affect the country's economic and
financial condition. Any higher than expected inflation could lead to a reduction in consumer purchasing
power and erosion of consumer confidence.

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Future financing from international organizations such as the IMF could require implementation of
certain measures, including more stringent austerity measures
In 2009, Romania entered into loan agreements with the International Monetary Fund ("IMF"), the
International Bank for Reconstruction and Development ("IBRD") and the EU as financial support during
the global economic downturn. In this context, it has been agreed to implement severe austerity measures
on Romania's public finances, including raising sales taxes and reducing public sector wages.
In 2011, Romania entered into new, precautionary agreements with the IMF, the European Union and the
World Bank. These agreements make medium term financial assistance arrangements available to
Romania in case of an emergency financial situation and signal the international community's continued
support for the policies and measures currently under implementation. Up to now no funds have been
drawn under the agreements.
Romania has implemented all structural reforms agreed under the 2009-2011 financial support package
and does not expect that it will be required to adopt any further structural reforms in relation to the new,
precautionary mentioned agreements. The macroeconomic targets set under the new agreements can
change over time through the IMF's and European Commission's ongoing monitoring and consultation
process.
If the macroeconomic targets under the precautionary agreements concluded with the IMF or EU become
tighter following future negotiations, or if Romania not only needs to draw upon the two agreements but
also to seek further financing from supra- or international organisations, the availability of such financing
might require Romania to implement further measures that could hamper economic growth and, if
indirect taxes are increased again, result in significant inflation.
In addition to the support extended by the IMF and EU under the precautionary package, Romania has
recently negotiated with the IBRD an EUR 1 billion development policy loan with deferred drawdown
option (DPL-DDO). The programme monitored under this agreement focuses on the elements of the
reform programme already agreed with the IMF and EC but gives a particular emphasis to three main
areas. These are: (i) increasing budget revenues through improved tax compliance and fiscal discipline;
(ii) improving the governance of state owned enterprises (SOE) in the energy sector to enhance their
efficiency and contribution to the budget; and (iii) enhancing fiscal sustainability and improving service
in the health sector through the optimisation of public health services.
A joint mission of the IMF/EC/WB visited Bucharest during July 31, 2012 to August 14, 2012, for the
sixth review of Romania`s economic programme. Following the meetings, a staff-level agreement has
been reached with the authorities on measures that will be discussed by the IMF`s Executive Board in a
meeting that is tentatively scheduled for late September 2012, following which it is expected that the IMF
will approve the revised Letter of Intent, enclosing the Memorandum of Economic and Financial Policies
and the Technical Memorandum of Understanding. The results of the review will also be presented to the
Economic and Financial Committee of the EU in September 2012. Preliminary findings of the mission
have been disclosed in the IMF's concluding statement of the mission dated August 14, 2012, which notes
that progress has been made in reducing inflation as well as government and external deficits, but much
remains to be done to increase still weak growth, that the recent political turmoil is taking a toll on the
economy and has dented confidence and that Romania is vulnerable to contagion from the euro area
crisis, which is why it is important for the Romanian authorities to focus on macroeconomic policy
priorities, notably achieving sound public finances, promoting low inflation with a flexible exchange rate,
containing financial sector risks, and pushing ahead with reforms to boost growth and job creation.
Although the preliminary findings of the mission have been disclosed in the IMF's concluding statement
of the mission, there is the possibility of additional disclosure in the very near future, through the release
of a revised Letter of Intent, enclosing the Memorandum of Economic and Financial Policies and the
Technical Memorandum of Understanding; this could have a material impact on the trading price of the
Notes.
Failure to access all available EU funds could slow Romania's further development
Historically, Romania has had a low absorption rate of EU funds.
A member state seeking EU funds must first apply under certain programmes. The member state must
then contract with, and subsequently pay, beneficiaries. Only at this point can the member state seek

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