Bulgarian Cabinet mandates Finance Ministry to contract bridge loan

Written by on November 26, 2014 in Bulgaria - Comments Off on Bulgarian Cabinet mandates Finance Ministry to contract bridge loan

Bulgaria’s Government gave Finance Minister Vladislav Goranov the mandate to begin talks with four banks to contract a short-term bridge loan, the Cabinet’s media service said on November 26.

Goranov can negotiate new debt worth up to three billion leva (about 1.53 billion euro) before the end of this year, which will have to be approved by Parliament at a later date. The funds would be used to finance this year’s Budget deficit, the government loan to the state guarantee fund to pay out the claims of depositors in the Corporate Commercial Bank (CCB) and liquidity support for Bulgarian banks, the statement said.

The decisions comes on the same day that Parliament approved, at second reading, the 2014 Budget Act revision, which allows the Cabinet to borrow up to 4.5 billion leva by the end of the year, including three billion on foreign markets.

The government has picked Citi, HSBC, UniCredit and Societe Generale to arrange a bond issue in the medium-term. The four banks will also “provide a short-term bridge loan to Bulgaria under unified terms, which will be repaid with the funds raised by the bond issue on international capital markets in 2015,” the Cabinet’s statement said.

The statement did not give any further details on the size of the bridge loan, but a Reuters report on November 25 claimed that it would amount to 1.3 billion euro, citing an unnamed industry source.

(Photo: Clive Leviev-Sawyer)

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