Bulgaria took on a debt of another 1.5 billion euros, with which it pays off an old loan in March (Overview)
- The USA is the biggest investor, having bought 26% of the Eurobonds
- The book was placed at almost twice the lower interest rate compared to similar issues of Romania and Hungary
Bulgaria took out a new debt of 1.5 billion euros, with which it will pay off an old one for almost this amount at the end of March.
On Tuesday, the finance ministry placed 10-year euro-denominated bonds with an annual interest rate of 4.5%. With the money, in addition to the payment of old debts, you will finance yourself and plan a deficit for this year in order to continue meeting the criteria for accepting the euro, announced Finance Minister Rositsa Velkova.
They boasted that Bulgaria has achieved the highest investor demand for a single tranche in foreign markets. The requests from the buyers were for a Bulgarian book for 7.3 billion euros.
And he announced that the largest amount of government bills – 26% – was bought by US investors. 23% are leased properties from the UK and Ireland, and a total of 15% are in the hands of investors from Germany and Switzerland. At least 11% went to buyers from Central and Eastern Europe, 10% went to Bulgarian investors.
The breakdown shows that 59% of the papers were bought by asset funds, 24% by banks, 6% by hedge and pension fund managers. The same percentage was owned by management agencies and only 1% by other investors, Velkova said.
According to her, the high interest of investors now, unlike in September last year, is due to several factors. The first was the removal of administrative barriers that prevent US traders from investing in our government securities. The fact that we are already a known issuer in these markets also played a role, this sale was not preceded by an advance presentation. The third reason is that an exit window was used without a party having an urgent need for liquidity.
The yield achieved for our securities is significantly more profitable compared to other European countries that issued similar debt, Velkova also said.
Hungary, for example, also sold 10-year bonds at the beginning of the year, but in dollars, with an interest rate of 6.5%. Romania placed a similar debt with 6.5% interest.
As long as there is no new budget for this year, Bulgaria will not take a new loan from the international markets, Velkova also stated.