Bulgaria Approaches 10 German Banks for Schuldschein LoanFinance | October 9, 2013, Wednesday // 13:29| views
The names of the German banks, which Bulgaria's government has approached, were not officially disclosed, but Deutsche Bank and Commerzbank surfaced in media reports. File photo
Bulgaria’s government has invited offers from ten German banks as it seeks a EUR 360 M Schuldschein loan to finance its budget shortfall.
Finance Minister Petar Chobanov, who will be in charge of placing debt under German legislation, is expected to pick the bank with the lowest fee.
The names of the banks were not officially disclosed, but Deutsche Bank and Commerzbank surfaced in media reports.
The Schuldschein loan, which is not well known in Bulgaria, is provided mainly by German banks and is used to raise capital from both private corporations, municipalities and states.
The government expects to wrap up negotiations about the terms of the loan by October 20, according to media reports.
Economists have said the proposed loan is cheaper and faster to arrange.
Last month Bulgarian Finance minister, Petar Chobanov, said the government is considering a syndicated loan arranged by foreign banks to be an option for financing the budget.
He added that the cabinet will choose a foreign bank to arrange the loan and to attract foreign investors as lenders, but it was only at the beginning of October that the government confirmed these will be German banks.
“Obtaining additional external financing by placing debt under German legislation will lead to diversification of debt funding sources and the investor base of the Bulgarian public debt. This will also prevent concentration of future debt payments,” the government said in a statement.
No further details about the yield and terms of the issue were immediately available.
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