Ministry of Finance Successfully Placed Euro-Denominated Bonds on International Capital Markets

On April 28, 2025, the Ministry of Finance successfully placed euro-denominated bonds on the international capital markets in two tranches, the ministry announced on April 29.

The first tranche consists of bonds with a maturity of 9 years, a volume of EUR 2.25 billion and an annual interest rate coupon of 3.5%. The second tranche consists of bonds with a maturity of 13 years, a volume of EUR 1.75 billion and an annual interest rate coupon of 4.125%.

The total nominal value of the submitted applications reached EUR 8.7 billion, which corresponds to an oversubscription of 2.2 times. As a result of strong investor interest and confidence, this oversubscription enabled a significant reduction in financing costs—down to 125 basis points for the 9-year bonds and 175 basis points for the 13-year bonds compared to the respective average interest rate swaps.

The achieved spreads and coupon rates represent the most favorable terms secured in the last three external market transactions for Bulgarian eurobonds with comparable maturities. The 9-year tranche reached the lowest spread over average interest rate swaps for the Republic of Bulgaria since 2020.

The timing of the issuance on the international capital markets was carefully selected, contributing to the successful raising of the necessary financing in an environment of ongoing uncertainty and market volatility. The transaction was further supported by growing international investor confidence in Bulgaria, based on the country's stable macroeconomic environment and strong expectations of joining the eurozone.

The dual-tranche bonds are part of the Bulgaria's Global Medium-Term Note Programme on the international capital markets.

The debt transaction is within the maximum amount of new government debt that can be incurred during the year of BGN 18.9 billion set in the State Budget Law for 2025. Up to the moment of issuance, the attracted debt financing for this year amounted to BGN 1.8 billion, realised through the placement of government securities on the domestic market between January and April 2025.

The completed transaction aligns with the primary objectives of debt management for 2025. The raised funds provide the necessary resource for refinancing the existing debt, financing the planned deficit of the state budget and securing the liquidity position of the fiscal reserve.