September 16 (SeeNews) - Bulgaria raised 2.25 billion euro ($2.24 billion) in a dual-tranche placement of 7-year and 12-year Eurobonds of 1.5 billion euro and 0.75 billion euro respectively on September 15, the finance ministry said on Friday.
The 7-year tranche carries a 4.125% coupon, whereas the 12-year issue has a coupon of 4.625%, the ministry said in a statement.
The Eurobond placement is within the new limit of 10.3 billion levs of government debt which was endorsed by parliament in July.
The issuance is part of the medium-term global debt issuance programme on international capital markets, under which the remaining amount that the government can borrow is 2.1 billion euro, the ministry added. It also said no further placements on international capital markets are planned for the remaining months of 2022.
"Over the coming months, the cost of and access to debt financing will pose an increasing challenge to sovereign debt issuers, in view of the ongoing geopolitical uncertainty, high inflation and the policy of the European Central Bank and the Federal Reserve to continue to raise key interest rates," the finance ministry noted.
The Eurobond placement is one of the means to finance budget deficit, refinance existing debt and ensure the legally-regulated levels of the fiscal reserve. Bulgaria plans a budget deficit of 6.2 billion levs ($3.2 billion/3.2 billion euro) in 2022, equivalent to 4.1% of the projected gross domestic product (GDP) for the year.
Bulgaria has raised 1.8 billion levs of sovereign debt in government paper auctions on the domestic market between March and May. Taking into account the current Eurobond, the government debt will reach 34.5 billion levs, or 22.9% of the forecast GDP, the finance ministry said.
Bulgaria last issued a dual-tranche Eurobond in September 2020, raising 2.5 billion euro in total.
($ = 1.00207 euro)