08.07.2014

"This is the best issuance we ever had in international markets", Minister of Finance Petar Chobanov commented the issued at the end of June Eurobonds in an interview for Bloomberg. According to his words grounds for this statement give not only the low yield of 3.055% and the lowest coupon of 2.95% for 10-year Bulgarian bonds, but also the relative indicators such as the spread to the midswap and to the German Bunds. Minister Chobanov noted that the comparison of the indicators showed that the issue this year was twice better than the one in 2012. "This means that international investors have confidence that the fundamentals of the country are quite strong and that is why we managed to achieve such good indicators", he is categorical. "And actually we sell to the investors this long term stability, our fiscal discipline and our stable banking system and that is why they regard what is happening in the banking system only as "a noise that will pass"", the Finance Minister further explained.

In respect of a possible new issuance of foreign debt this year Minister Chobanov said that this would hardly happen. "We are an issuer who seldom issue bonds and only when we have refinance old debt as is the case with this issue - we will use the resource to cover the maturing in January 2015 debt. Most probably we will not make again such a step until 2016", the Minister of Finance further said.

Petar Chobanov comments that the bank runs are under control and would not be repeated; the Bulgarian institutions are ready to support the financial system, if necessary. "We have this possibility for liquidity assistance in place and we are following very closely with the central bank the situation in the banking system and we are ready to give support if needed. But I don't think there will be such need. The situation is calm now and everything is normal", he said. The Minister stresses that the bank runs didn't damage the economy and the government's economic-growth target of 2.1 per cent is attainable this year.

According to the Finance Minister there is no need for budget revision. "Revenue will increase in the second half and the budget-deficit target of 1.8 per cent of gross domestic product is "achievable," he said. Bulgarian politicians across the spectrum are committed to fiscal discipline, no matter which party is in power, underpinning fiscal stability and investor confidence, Minister Chobanov added.