By Clive Leviev – Sawyer of The Sofia Globe
Bulgaria’s cabinet consented on March 19 2014 to preparation to issue government securities on the international capital markets, a government media statement said.
The cabinet mandated finance minister Petar Chobanov to proceed with preparations and negotiate with selected banks and legal advisers on the transaction and to sign all the documents necessary for the negotiation, organisation and implementation of the issue.
The 2014 Budget Act allows Bulgaria to take on external debt to a sum of 3.9 billion leva (about 1.9 billion euro).
Part of the money raised will go to refinance global bonds issued in 2002 for $1.086 billion, maturing in January 2015.
The rest will be used to repay debt with a term of repayment in the current year and to go towards covering the budget deficit.
The finance ministry already has chosen, out of 20 applicants, three banks as intermediaries: JP Morgan, Citibank and HSBC. The consortium of three banks are to hold consultations to decide the currency, maturity and the best time to launch.
It is possible that the new government securities will be issued in two tranches of about 750 million euro each, and for maturity on some securities to be five years and the others 10 years.