Bulgaria to raise external borrowing by 1.2B euro in 2012
Bulgaria's Government plans to boost external borrowing by 1.2 billion euro in 2012, the country's Finance Ministry said on November 18 2011.Most of the funding is expected to come from new bond sales to ensure financing for the repayment of eurobonds aggregating about 800 million euro, which fall due in early 2013. The bond issues will lead to a decline in the country's debt a year later, thus partly offsetting the increase to be recorded in 2012.The ministry provided scant information about the planned bond sales given the volatile foreign markets and fears that speculators could artificially raise the yield on Bulgarian securities, which could make external funding more expensive.The Government also plans to obtain funds under existing and new loan agreements with foreign financial institutions, the statement said.About 120 million euro of the total will be secured as part of a Structural Programme loan agreement with the European Investment Bank (EIB) to back projects funded under operational programmes.The country is also gearing up for the start of a co-operation strategy with the World Bank for the period 2011-2013, which is expected to ensure three loans worth 80 million euro each under the Development Policy Loan (DPL) programme for implementing reforms in the railway sector.The Government's strategy also envisages the redemption of 202 million leva in foreign state loans.Bulgaria also plans to issue 1.22 billion leva worth of securities on the domestic market in 2012 and to repay 735 million leva in outstanding debt, meaning that net financing will make up 484 million leva. (Source: The Sofia Echo)