Government took the largest euro loans for a day without waiting for euro area sign
The government of Bulgaria has taken a total of € 4 billion loans in two debt emissions, which were sold today with maturity in 2034 and 2038. The Ministry of Finance has already filed BGN 1.8 billion (just over € 920 million) in the internal market.
According to Capital Weekly, the operation is in re -enrollment of over € 8.5 billion, which is evaluated as a strong interest, but is also somewhat surprising as it was expected in June – following the convergence report of the European Central Bank and the European Commission with the possible approval of the country’s membership in the euro area.
The European Commission has scheduled a date for the convergent report on the euro
All rating agencies have long stated that this would give them reason to raise Bulgaria’s credit rating, which also contains logic for loans under more favorable conditions.
Bloomberg reports the news, explaining that this is the biggest debt issue from Bulgaria to euros within a day, and that the aim is to finance the growing budget deficit in the preparation for the introduction of the euro.
- The 9-year bonds are for € 2.25 billion for an annual coupon of 3.5% plus 125 base points, the agency said, citing a source from the market. The same yield points to Capital – 3.65%-3.70%. When the issue is closed, the offers were for a total of € 4.9 billion in this yield.
- The 13-year debt is € 1.75 billion with a pill of 4.125% plus 175 base points (or placement at 4.3% yield, according to Capital). Here the demand at the end was for more than € 3.6 billion.
Bulgaria has already taken a debt in euro (8- and 20-year-olds) and dollars (12.5-year-old) at the end of August 2029, when the official government marketed the equivalent of € 4.35 billion ($ 4.8 billion) now the government has decided to collect at the first time of the international markets. In the budget for 2025, the limit is BGN 18.9 billion (€ 9.66 billion) with the repayment of liabilities for BGN 3.7 billion (€ 1.89 billion).
Government debt is approaching 25% of the economy
However, the deficit is about BGN 6.4 billion (€ 3.27 billion) and another BGN 7 billion (€ 3.58 billion) is intended to be taken as a loan for the capitalization of state -owned companies such as BDB, BEH and others. Their management has been criticized for years, and with this move the limitations of up to 3% deficit from GDP are circumvented.
