/ world today news/ We take a syndicated loan from banks abroad in the amount of up to BGN 3 billion.
State debt in the amount of nearly BGN 1.5 billion will be placed on the domestic market by Christmas. In addition, the Ministry of Finance will take action to take on a new external state debt of up to BGN 3 billion. This is clear from the budget update proposed by the Ministry of Finance for 2014. It has not yet been finally decided, but most likely the new foreign debt will be in the form of a syndicated loan from several banks abroad, “Standart” learned.
Negotiations are already underway with financial institutions such as the EIB and the EBRD, but also with private banks, in order to achieve the best interest rates for the country. Issuing new external debt in the form of bonds would take quite a bit longer and is therefore not the best option at the moment as Christmas is about a month away. Talks are already underway with the banks in our country about the release of government securities on the domestic market for BGN 1.5 billion, and preliminary studies indicate that there is great interest in the upcoming issues. However, it is still being specified with what term and in what currency the new issues of government securities should be, in order to have the greatest interest in them on the part of the banks.
The release of government securities on the domestic market is the fastest way to attract funds to the fiscal reserve. In the budget update, the government debt ceiling is expected to increase by up to BGN 4.5 billion. This is necessary to cover the budget deficit, which with the update rises by nearly BGN 1.6 billion to BGN 2.992 billion BGN, to provide funds to the Deposit Guarantee Fund in banks, which must pay out the guaranteed deposits in KTB, as well as a reserve of BGN 900 million, in case a need for new liquidity support arises. In the budget update, it is written that the Council of Ministers can give the Deposit Guarantee Fund loans from the central budget in a total amount of up to BGN 2 billion. For this purpose, bridging financing from abroad for up to BGN 3 billion will be provided. In total, the necessary for the treasury, funds in the amount of up to BGN 4.5 billion will be provided with a combination of internal and external debt, in order to achieve the best possible conditions – lower interest rates and quick attraction of the funds.
The fiscal reserve at the end of September was BGN 8.8 billion. But on November 30, the bonds in the amount of BGN 1.228 billion, which were placed at the end of June, to ensure unconditional support of liquidity in the Bulgarian banking system, mature system. The next big payment on the country’s debt is on January 15, when the dollar bonds, which were placed when Milen Velchev was the finance minister, mature. Then USD 1.086 billion (BGN 1.555 billion) must be paid. Funds from the fiscal reserve are then also needed to pay subsidies to farmers as well as to finance projects under EU operational programs which will then be reimbursed by the EU.
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