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THE BULGARIAN DEPOSIT INSURANCE FUND WILL MAKE A PARTIAL EARLY REPAYMENT OF BGN 1,145 BILLION UNDER THE CONTRACT WITH THE STATE DATED 03.12.2014

13.12.2016

Early next week the Bulgarian Deposit Insurance Fund ("BDIF") will make a partial early repayment of BGN 1,145 billion from the loan extended from the central budget under the Contract for granting a loan signed between the Republic of Bulgaria and the BDIF on 03.12.2014 for the purpose of financing the shortage of funds of the BDIF to pay the insured deposits in CCB AD after its licence was revoked. For this purpose, on 19.12.2016 the BDIF will utilise EUR 298,5 million from the government guaranteed loan extended by the European Bank for Reconstruction and Development and EUR 250 million from the government guaranteed loan extended by the International Bank for Reconstruction and Development (the World Bank); for the remainder the Fund will use its own resources to the amount of EUR 72,227 million. Thus the BDIF will optimise the structure of its funding, reducing substantially the interest expenditure, extending the maturity period of the utilised loans and diversifying the sources of funding.

The amount of BGN 1,145 billion, that is repaid early, remains available in the fiscal reserve, while in the medium-term the resources may be used to repay liabilities.

We would like to remind that the amount of the loan under the Contract is up to BGN 2 billion, of which the BDIF has utilised BGN 1,675 billion. The interest is fixed at a rate of 2.95% and the interest payments are made once a year, on 15 April. The repayment of the loan is one-off - on 15.04.2020, with the option of early repayment in full or in part. The total amount of interest paid under the loan during 2015 and 2016 is BGN 65 987 054,80. After making the planned partial early repayment, the BDIF intends to repay the outstanding principal of BGN 530 million before maturity, too.

The loan was intended to ensure a smooth process of payment of the insured deposits in CCB AD, which was successfully done.

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