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THE MINISTRY OF FINANCE REPAID THE PRINCIPAL AND INTEREST ON THE EUROBONDS ISSUE MATURING ON 9 JULY 2017

07.07.2017

The Ministry of Finance has ordered the payment of EUR 990.375 million to the holders of five-year Eurobonds of the Republic of Bulgaria issued at annual interest coupon of 4.25% and maturing on 9 July 2017. The sum includes EUR 950 million principal and the last payable interest coupon of EUR 40.375 million.

The funds for the repayment of the maturing issue were raised during the double tranche of bonds to the amount of EUR 1.994 billion successfully issued on the international capital markets in March 2016 under the Global Medium-Term Note Programme for debt issuance on the international capital markets. The transaction included one tranche of 7-year bonds to the amount of EUR 1.144 billion, at interest coupon of 1,875%, and one tranche of 12-year bonds to the amount of EUR 850 million, at interest coupon of 3,000%. Part of the proceeds were used to repay an outstanding debt last year; the rest were kept available as of the end of 2016 to cover the Eurobonds maturing on 9 July 2017, after the government didn't need to use the financial resources for the purpose of preserving the stability of the banking system in connection with the conducted asset quality review and stress tests of the Bulgarian banking system.

After the payment, Bulgaria's government debt has been reduced by EUR 950 million - from EUR 12.884 billion to EUR 11.934 billion. This is a drop in the debt-to-GDP ratio of almost 2 percentage points, from 25.9% to 24.0% respectively. Thus the state budget will save debt service expenditures of EUR 40.375 million per year.