Bulgaria to issue EUR 460.2mn of debt paper in January 2014

By bne IntelliNews January 6, 2014

Bulgaria plans to issue BGN 900mn (EUR 460.2mn) worth of debt on the domestic market in four auctions in January 2014, according the finance ministry's bond offering calendar for the month. 

The country will auction BGN 400mn worth of six-month T-bills on January 6 and a nine-month tranche of the same amount will be offered for sale on January 27. The finance ministry will also issue BGN 50mn in 10.5-year T-bonds on January 13 and another BGN 50mn in five-year bonds on January 20.

The government's decision to increase the outstanding public debt by as much as 6% (up from BGN 13.9bn at end-Dec, according to IntelliNews calculations) in just one month is prompted by its promise to pay subsidies to agricultural producers in the first month of 2014. Technically, the state could withdraw a part of the sum needed or the whole of it from the fiscal reserve but borrowing for short-term liquidity purposes has proven to be the more politically smooth option. The lowering of the fiscal reserve below its end-year limit of BGN 4.5bn has always been a cause for attacks from the parties in opposition.

In February 2013, the government of Boyko Borissov, leader of CEDB, dismissed Simeon Djankov from the post of finance minister for refusing to tap debt markets to pay agricultural producers early subsidies. Eventually, CEDB issued a BGN 800mn worth of six-month T-bills with an average yield of 1%.

Since then, S&P has downgraded the outlook on Bulgaria's long- and short-term foreign and local currency sovereign credit to negative from stable, while affirming it at BBB/A-2, and Fitch has affirmed the country's long-term local currency rating at 'BBB' with a stable outlook. S&P has noted that Bulgaria's economic recovery has been slow and warned that the chances of lowering the state's sovereign rating within the next two years are at least one-in-three.

Bulgaria plans to borrow a total of BGN 4.4bn this year, of which BGN 3bn the government will try to place on foreign markets and use the proceeds to roll-over maturing debt. The rest will be used to finance the deficit, which is seen at BGN 1.47bn (equal to 1.8% of the projected GDP).

Related Articles

Bulgarian prosecutors file indictment against defence minister

The Sofia city prosecutor’s office filed indictment with Sofia city court against outgoing Defence Minister Nikolay Nenchev over his alleged failure to ensure aviation safety and the ... more

Bulgaria’s former justice minister launches anti-corruption party

Bulgaria’s former Justice Minister Hristo Ivanov will lead the newly formed Yes Bulgaria party as it prepares to compete in the upcoming general election on an anti-corruption platform.  ... more

Belgium’s KBC buys United Bulgarian Bank and Interlease for €610mn

Belgian-based KBC Group said on December 30 that it is acquiring United Bulgarian Bank (UBB) and Bulgarian leasing ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss