The caretaker government aims to cover 1.5 billion euros worth of bonds maturing next week
Bulgaria will offer US dollar-denominated bonds for the first time in 22 years as it tries to plug its budget deficit and pay off maturing debt amid a prolonged political crisis, Bloomberg reports.
The country will offer 12-year dollar-denominated securities as well as euro-denominated bonds with maturities of 8 and 20 years in a deal that can be priced as early as today (August 28), the agency noted, citing to a familiar source. BNP Paribas, Citigroup, ING Groep NV and UniCredit are managing the deal.
Bulgaria is gearing up for another snap election in October, the seventh in three and a half years, as political parties have failed to form a stable majority coalition. The caretaker government appointed on Tuesday aims to cover 1.5 billion euros ($1.7 billion) in bonds maturing next week and finance a planned budget deficit of 3 percent of gross domestic product.
Initial price talks were about 165 basis points above the mid-swap for the 8-year euro-denominated bond, 220 b. p. above the midpoint for 20-year bonds in euro and 170 b. t. above the midpoint for 12-year dollar bonds, said the source, who requested anonymity because he is not authorized to speak publicly.
The government can sell new debt for a total of 10 billion leva ($5.7 billion) in the next 4 months, according to this year’s budget, after already issuing 1.7 billion leva on the domestic market. Two previous governments this year did not tap into international markets.
Illustrative Photo by Karolina Kaboompics: https://www.pexels.com/photo/dollar-banknote-on-white-table-4386155/
