Bulgaria takes out 4 billion euros in debt amid strong international interest

The Bulgarian Ministry of Finance has successfully placed two euro-denominated bonds on the international capital markets, totaling EUR 4 billion. The first issue has a 9-year maturity with a nominal value of EUR 2.25 billion and an annual coupon of 3.5%. The second is a 13-year issue with a nominal value of EUR 1.75 billion and an annual coupon of 4.125%.

The total nominal value of the submitted applications has reached 8.7 billion euros, which corresponds to an oversubscription of 2.2 times, as reported by the ministry.

Due to strong investor interest and confidence, this oversubscription has allowed a significant reduction in the cost of financing for 9-year bonds to 125 basis points, and for 13-year bonds to 175 basis points compared to the corresponding average interest rate swaps.

The achieved spreads and interest coupons represent the best terms achieved in the last 3 transactions on foreign markets, compared to similar maturity Bulgarian Eurobonds. The nine-year issue achieved the lowest spread compared to the average interest rate swaps for Bulgaria since 2020.

The Ministry of Finance points out that the timing of the entry into international capital markets (April 28, 2025) was "carefully chosen."

This contributed to the success in raising the necessary financing in the conditions of continued uncertainty and volatility of the market environment. The transaction was also positively influenced by the growing confidence of the international investor community in our country, based on the stable macroeconomic environment and confidence in the expected accession to the eurozone," reads the official statement of the Ministry of Finance.

The double issue bond is part of the Medium-Term Global Debt Issuance Program on international capital markets.

The transaction that was implemented followed the main goal of public debt management for 2025. The funds raised provide the necessary resources to refinance the outstanding debt, finance the planned state budget deficit, and secure the liquidity position of the fiscal reserve, says the Ministry of Finance.

Earlier on Tuesday, Assen Vassilev, co-chair of the main opposition party "Continuing the Change" and finance minister in several governments, congratulated the Ministry of Finance for the successful auctions.

Today, we saw that the government took out 4 billion euros in debt on rather good terms plus 125 basis points for the shorter issue and 185 for the longer issue. This is within the budget, the results achieved are good, and for this we must congratulate the Ministry of Finance," Vassilev told journalists in the corridors of parliament.

According to him, however, it should have been taken into account that the convergence report on Bulgaria’s readiness for the eurozone will be released on June 4. If it is positive, the country's credit rating would be raised by at least two points, which would have improved debt conditions.

Translated by Tzvetozar Vincent Iolov