site.btaFinance Ministry Issues Bonds Totalling EUR 3.2 Bln

The Ministry of Finance on Tuesday issued EUR-denominated bonds on international capital markets in two tranches, the Ministry reported on Wednesday.

The first tranche consists of EUR-denominated bonds with a 10-year maturity, totalling EUR 2 billion and an interest coupon of 3.375%. The second one consists of EUR-denominated bonds with a 20-year maturity, totalling EUR 1.2 billion and an interest coupon of 4.125%.

The completed transaction aligns with the primary objectives of debt management for 2025, which include securing the necessary resources for refinancing existing debt, funding planned budget deficits, and maintaining the liquidity position of the fiscal reserve.

The aggregate nominal value of applications exceeded EUR 13 billion, corresponding to an oversubscription of more than four times, the Ministry of Finance said.

The strong investor interest, the highest reached so far, was catalysed by the Council of the European Union's decision to admit Bulgaria to the euro area from January 1, 2026, and the subsequent increase in Bulgaria's sovereign credit rating by &P Global Ratings, Fitch Ratings, and Scope Ratings. This allowed for a substantial reduction in the cost of funding, measured as the spread over the average interest rate swap.

The originally proposed spread on the 10-year bonds of 135 basis points was reduced by 40 basis points to a level of 95 basis points.

For the 20-year bond, the reduction is 35 basis points, from 180 basis points to a level of 145 basis points relative to the corresponding average interest rate swaps. The spread over the benchmark German federal bonds is 91 basis points for the 10-year tranche and 125 basis points for the 20-year tranche.