Bulgaria will borrow BGN 500 million

The Ministry of Finance and the Bulgarian National Bank have announced a date for a new auction in which the country will offer government bonds with a term of 5 years with a total value of BGN 500 million. The Bulgarian Central Bank officially announced this today. The size of the issue is a record for the Bulgarian domestic market.

The experts have set October 11 for the collection and, according to the BNB announcement, want zero interest rates on the securities. This will not set a precedent and just a month ago a new issue of 5 year securities reopened, which were sold at a negative yield of 0.15%. In practice, this means that investors pay the state to borrow money. It is now expected that the same return will be achieved with negative values.

So far this year the country has withdrawn BGN 1.3 billion and if this auction is successful the amount will grow to BGN 1.8 billion. No particular surprise is expected from creditors – banks, pension funds, insurance companies.

The debt ceiling for this year has been set at 4.7 billion BGN, which will finance the budget deficit. However, all of this money is unlikely to be withdrawn as the budget is in the red for the third month.

/ ClubZ

Copyright (c) Novinite.com. Published with permission from Big News Network

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