Home » Business » Deutsche Bank and Raiffeisen Bank grant the government a loan of BGN 700 million –

Deutsche Bank and Raiffeisen Bank grant the government a loan of BGN 700 million –

/ world today news/ The largest German bank – Deutsche Bank (“Deutsche Bank”) and the largest bank in Central and Eastern Europe – the Austrian Raiffeisen Bank International (“Raiffeisen Bank International”) will grant the government a loan of 360 million. euro, reports “Capital Daily”. The choice of the two financial institutions was made by the Minister of Finance Petar Chobanov, who revealed that 6-7 offers from banks were considered.

With the update of the 2013 Budget, the government was given the opportunity to take out an additional BGN 1 billion loan. At the beginning of September, the first BGN 300 million were taken from the Bulgarian market, in the form of 1-year government securities (Government securities) with a yield of 0.6%. According to the publication, the remaining BGN 700 million (€360 million) will be taken under the Schuldschein scheme, which is a relatively new financial instrument provided by a limited number of large European (mainly German) banks.

One of the advantages of the scheme is that it raises funds quickly, is relatively cheap and has a simplified legal format. Among the disadvantages of private placement is its non-transparent nature. If there is insufficient information on the procedure, suspicions of predestination and collusion may arise.

The other option was for the government to place a Eurobond issue on the foreign market, which is also more transparent, but takes more time.

Most likely, next week, the loan documents will be submitted to the parliament for approval.

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