Bulgaria signed an agreement with Deutsche Bank AG (DBK) to raise 360 million euros ($487 million) in so-called Schuldschein loans to service debt and increase its fiscal reserves.
The agreement, which must be ratified by parliament, will enable the cabinet to tap 7-year, 10-year and 15-year credit lines from institutional investors, the Finance Ministry said in an e-mailed statement today from the capital Sofia. Deutsche Bank and Raiffeisen Bank International AG (RBI) are managing the transaction, the ministry said. Schuldschein loans are promissory notes issued privately under German law.
“The specific terms of the financing will be determined after marketing among investors and preliminary subscriptions, as the practice is with Schuldschein loans,” Yasser El Amin, a finance ministry press officer, said by phone today.
The minority cabinet of Prime Minister Plamen Oresharski revised the budget in August, widening the deficit to 2 percent of gross domestic product from a previous 1.3 percent to cover increased social spending and service debt payments. Oresharski came to power on May 29 after anti-austerity protests forced out former Premier Boyko Borissov’s Gerb party and triggered a snap election.
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