Bulgaria Govt Greenlights Eurobond Sale

Bulgaria’s Finance Minister Simeon Djankov ia pictured here in parliament. Photo by Sofia Photo Agency

Bulgaria's government issued on Wednesday a mandate for the sale of Eurobonds on international markets to raise funds for repaying debt maturing in early 2013.

Finance Minister Simeon Djankov has been entitled to go ahead with preparations of the sale under amendments to the State Budget Act, which the cabinet approved at its meeting.

Bulgaria plans to tap international markets at the end of May or in June to raise funds to repay about EUR 835 M (USD 1.07 B) in 11-year Eurobonds maturing on January 15, 2013.

The bonds offered on international markets will be worth up to BGN 2 B, the government decided.

Bulgaria's current center-right cabinet takes pride in its fiscally prudent policies in running the country, which has the second-lowest public debt in the EU after Estonia.

Analysts however have voiced concerns that the eurozone crisis and Bulgaria's vulnerability to Greece's woes may make it difficult for it to tap international markets at a good cost.

Djankov recently came under fire for proposing changes to the governance of the Silver (Retirement) Fund that would enable a more active management of the collected funds and the investment of up to 70% of it in government securities.

The Fund is part of the country's fiscal reserve and after heeding the critics, he abandoned the idea.