Bulgaria raises 2.5 billion euro with two long-term bond issues

Written by on September 16, 2020 in Bulgaria - Comments Off on Bulgaria raises 2.5 billion euro with two long-term bond issues

Bulgaria’s Finance Minister Kiril Ananiev said on September 16 that it has sold 2.5 billion euro in 10-year and 30-year eurobond issues on international markets, with the funds slated to finance the government’s economic measures to blunt the impact of the Covid-19 crisis and refinance maturing debt.

Ananiev said that the high interest shown by investors and the low yield made the two bond issues a success. The 30-year eurobond was also the longest maturity debt currently issued by Bulgaria, he said.

Interest during the bookbuilding stage was so high, Bulgaria raised its initial target of raising two billion euro to 2.5 billion euro, he said.

Bulgaria sold 1.25 billion euro of each bond issue, but final orders stood at 3.6 billion euro for the 10-year bond and 3.6 billion euro for the 30-year debt. Demand came from across Europe, with fund managers and banks dominating the orderbooks of both bond issues, the Finance Ministry said.

The 10-year bond issue, maturing on September 23 2030, has a fixed annual coupon of 0.375 per cent. The 30-year bond issue, maturing on September 23 2050, has a fixed annual coupon of 1.375 per cent. Both bond issues would be listed on the Luxembourg Stock Exchange, the ministry said.

Citi, JP Morgan, BNP Paribas and Unicredit were the lead managers of the bond issues.

Bulgaria’s Parliament approved a budget revision in April, setting a deficit of 2.9 per cent of target GDP and raising the annual borrowing ceiling for 2020 to 10 billion leva (about 5.11 billion euro), meant to cover increased government spending to help businesses weather the disruption caused by the Covid-19 pandemic.

Although the consolidated budget figures showed a surplus of 1.72 billion leva through seven months of the year, Ananiev said that revenues were expected to fall short of the targets in the 2020 Budget Act and a second Budget revision was possible later this year.

(Photo: Miroslav Sárička)

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