Bulgaria’s Finance Ministry will borrow 360 million euro from German investors before the end of the year, with the Cabinet authorising the foreign debt operation at its sitting on October 2.
“The realisation of additional external financing of up to 360 million euro through placing debt under German legislation will lead to diversification of debt sources for financing and the investor base of Bulgarian government debt, as well as also avert concentration of future debt payments,” the Government said in a statement.
The new government debt will be issued under the amended provisions of the 2013 Budget Act, the Cabinet said. In August, Parliament approved a Budget revision that would allow the Government to borrow an additional one billion leva (about 511 million euro) this year.
The Cabinet statement gave no further details about the new debt.
According to a report by news agency Reuters, the Finance Ministry would seek a loan from “German banks with investors also able to participate” rather than a bond issue, which would take longer to arrange.
Meanwhile, a report by Bulgarian news website Mediapool.bg said that Bulgaria’s Cabinet would seek to borrow the funds for a period of 10 years, targeting an interest rate of about four per cent.
(Bulgarian Finance Minister Petar Chobanov. Photo: minfin.bg)