Bulgaria sells 3.1B euro in bonds on March 19 – updated

Bulgaria has sold 3.1 billion euro worth of bonds on foreign markets, the largest amount ever borrowed by the country in one go, the Finance Ministry said on March 20.

The bonds were sold in three separate issues – 1.25 billion euro in seven-year bonds, one billion euro of 12-year bonds and 850 million euro worth of 20-year bonds, with the latter also being the longest euro-denominated government securities sold by Bulgaria.

The Finance Ministry said that the seven-year bonds carried a yield of 2.18 per cent, with the 12-year bonds offering 2.73 per cent and the 20-year bonds sold at 3.26 per cent yield.

In total, the ministry received bids worth 4.9 billion euro from 370 investors, which was proof of “Bulgaria’s creditworthiness, its stable macroeconomic fundamentals and the exceptional consistency of its financial stability and fiscal discipline policies,” the ministry said.

Analysts quoted by Reuters said that the low interest rates were due to the strong demand for government securities created by the European Central Bank’s one trillion euro quantitative easing programme.

The deal was the largest euro-denominated bond transaction by a country in the Central and Eastern Europe, Middle East and Africa region, managed by a single bank syndicate, the ministry said. Bulgaria had earlier picked Citi, HSBC, Societe Generale and Unicredit to manage the bond issue.

Bulgaria will borrow eight billion euro until the end of 2017 to refinance maturing debt and cover planned government deficits, under a plan approved by Parliament last month. This year’s borrowing ceiling is set at 6.9 billion leva (about 3.5 billion euro).



The Sofia Globe staff

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