Bulgaria Selling 2 Billion Euros of Bonds as Demand Cuts Yield

Bulgaria drew enough demand from debt investors to cut initial yields on its first benchmark-sized Eurobond offering in a year.

The European Union’s poorest country is selling 1.14 billion euros (1.27 billion) of seven-year notes at 185 basis points above the euro mid-swap rate and 850 million euros of 12-year securities at a spread of 235 basis points, according to a person with knowledge of the transaction who asked not to be identified because the details are private. That compares with initial guidance of about 205 basis points and 245 basis points, respectively.

The government in Sofia is raising funds to refinance debt, help cover a budget deficit and build a cash buffer before the central bank completes a stress test of the nation’s lenders, Finance Minister Vladislav Goranov told Capital newspaper last week. Bulgaria sold a record 3.1 billion euros of debt a year ago.

The country’s 1.25 billion euros of March 2022 notes fell on Monday, lifting the yield five basis points to 1.70 percent as of 6:35 p.m. in Sofia. The yield on the bonds, rated Baa2 at Moody’s Investors Service, the second-lowest investment grade, is down five basis points this year and touched a low of 1.61 percent on Feb. 1.

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