Bulgaria to raise 1.3 bln euros in foreign debt this year: sources

First Investment Bank AD

18/11/2014 12:50

By Tsvetelia Tsolova 
    SOFIA, Nov 18 (Reuters) - Bulgaria wants to raise about 1.3 
billion euros ($1.6 billion) in bridge financing from foreign 
banks by the end of the year, to be refinanced by global bonds 
in 2015, three sources familiar with the plans told Reuters.  
    The Balkan country, one of EU's least indebted members, 
needs to raise 4.5 billion levs ($2.9 billion) in 2014 to plug 
its budget gap and prop up the banking system after the collapse 
of Corporate Commercial Bank  6C9.BB . 
    Foreign banks including Citigroup  C.N  and Unicredit 
 CRDI.MI , Societe Generale  SOGN.PA , Deutsche Bank  DBKGn.DE  
and HSBC  HSBA.L  have shown interest in providing bridge 
financing, the sources told Reuters. 
    Other potential bidders for the loan, which should be agreed 
in the next two to three weeks, include Intesa Sanpaolo 
 ISP.MI , BNP Paribas  BNPP.BA , KBC  KBC.BR  and Raiffeisen 
 RBIV.VI , two of the sources said. 
    A third source also said JP Morgan  JPM.N  and Bank of 
America  BAC.N  could take part, adding that the finance 
ministry is likely to name the banks later this week. 
    "The bridge financing amount is a serious sum for commercial 
banks, so it will be a syndicated effort by four or five banks," 
one industry source said, declining to be identified.   
    "The loan is necessary, as there is not enough time to tap 
global markets this year, but the finance ministry will probably 
have to do that in the first half of next year," the source 
said.  
    The government plans to raise another 2 billion levs on the 
local market.  
    Bulgaria needs to lend its Deposit Insurance Fund some 2 
billion levs to cover guaranteed deposits at Corpbank. 
 ID:nL6N0SW4FJ  
    Another 1 billion levs will be used to refinance government 
support to First Investment Bank  5F4.BB , the third biggest 
lender, which was caught up in the panic. 
    Bulgaria's new government needs parliament's approval to 
raise the deficit target to 3.7 percent and raise new debt. 
Parliament is expected to take an initial vote on later on 
Tuesday.  ID:nL6N0T03T2  
    "We will ask the parliament to allow us to hold talks and 
arrange the raising of new debt so that we can act swiftly once 
the amendments of the 2014 budget are finally approved", the 
finance ministry spokeswoman told Reuters.  
 
 (Editing by Matthias Williams/Ruth Pitchford) 
 ((tsvetelia.tsolova@thomsonreuters.com; +359-2-93-99-731;)) 
 
Keywords: BULGARIA DEBT/