Bulgaria picks four banks for 1.3 bln euro bridge loan: sources

First Investment Bank AD

25/11/2014 17:22

SOFIA, Nov 25 (Reuters) - Bulgaria has picked Citi  C.N , 
HSBC  HSBA.L  and local units of Societe Generale  SOGN.PA  and 
Unicredit  CRDI.MI  to arrange bridge financing for this year, 
two sources familiar with the process told Reuters on Tuesday. 
    Bulgaria's parliament has given initial consent to plans to 
raise an extra 4.5 billion levs ($2.9 billion) to plug this 
year's budget gap and prop up the banking system after the 
collapse of Corporate Commercial Bank  6C9.BB . 
    "Two international and two local banks have been chosen to 
provide the bridge financing ... 1.3 billion euros ($1.6 
billion)," an industry source, who asked for anonymity, told 
Reuters.  
    The Balkan country needs to lend its Deposit Insurance Fund 
some 2 billion levs to cover guaranteed deposits at Corpbank. 
Another 1 billion levs will be used to refinance state support 
to First Investment Bank (Fibank) 5F4.BB , the third biggest 
lender, which was caught up in the panic in June. 
    Earlier on Tuesday the European Commission approved the 
extension of state aid to Fibank and agreed it can be extended 
for up to 18 months. ID:nL6N0TF1WG  
    The finance ministry's spokeswoman declined to comment and 
said the lenders' names will be made public only after 
government approval.   
     Some 19 banks have expressed interest in providing the 
funds, which Bulgaria will refinance by issuing global bonds 
next year.  ID:nL6N0T82Z5   
    A second source expected these bond sales in February or 
March next year, depending on market conditions.  
    Finance Minister Vladislav Goranov told reporters he plans 
to present his budget and debt plans for 2015 to the government 
by the end of the week. He has already said the 2015 fiscal 
deficit will not exceed the EU threshold of 3 percent of GDP. 
    New borrowing will bring Bulgaria's public debt to 28.4 
percent of economic output this year, up from 18 percent in 
2013, but it will remain the European Union's least indebted 
state. 
(1 US dollar = 0.8050 euro) 
(1 US dollar = 1.5679 Bulgarian lev) 
 
 (Reporting by Tsvetelia Tsolova; Editing by Ruth Pitchford) 
 ((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;)) 
 
Keywords: BULGARIA DEBT