Republic of Bulgaria

  • 26 Sep 2002
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Rating: B1/BB-/BB-

Amount: $759m exchange offer

Maturity: February 15, 2015

Issue price: 102.75

Coupon: 8.25%

Launched: Thursday September 26

Joint books: Citigroup/SSSB, JP Morgan

Bookrunners' comments:

Citigroup/SSSB- The swap went remarkably well, especially given the market volatility. The Bulgarians had parliamentary approval to swap a maximum of $800m, so getting to this level and achieving the key benchmarking, duration extension and debt reduction objectives was quite a success.

Comparing the dollar 2015 and the euro 2013, it was quite clear that the 2015 had performed relatively better over the summer, supported by its smaller size and the growing shift in the dollar sector towards safer sovereign credits.

Looking at the euro 2013 from the perspective of the Bulgarians' debt repayment schedule, it also seems that tapping it again could create a bit of a repayment hump. Now the 2015 has reached benchmark size.

At the beginning of the year Bulgaria had approximately $4.7bn of outstanding Brady bonds. As a result of this transaction and the earlier swap in March this has been reduced to around $2.5bn. It is a great result for Bulgaria to have taken out almost 50% of its Bradys, achieved significant cost savings and established benchmark bonds in both dollar and euros in only a matter of months.

JP Morgan - This was a follow-up to the last transaction in March, which was pretty complex. It made sense to do it now, because some investors had some Bradys left over from the initial deal which they did not offer to swap at the prices on offer at the time. It was a useful time to go back to the market and add liquidity to the 2015 dollar bond.

We thought about the timing carefully. We wanted to do it before the elections in Brazil, because it is still not clear what the outcome there will be.

This time, the swap was fairly heavily targeted. We had a good idea from the original deal about the specific investors who had not participated. The roadshow consisted of one-on-one meetings and some conference calls with European bondholders.

We tried to make sure of two things. Firstly, that investors understood the Bulgarian credit story and its improving fundamentals. Secondly, we talked through the transaction with investors and made sure they were comfortable with the 2015 structure.

The 2015 bond is trading at around 102.25/102.75, having been launched. We launched this second deal at 102.75.

Bulgaria has done three international bond issues and proved itself to be an agile borrower. The sovereign has reprofiled its debt structure exceedingly well.

The Brady Flirbs are now trading a 90.75, as are the Discs, while the IABs are at 89, so they are a little lower than the levels investors swapped them at.

There is a subset of investors that is still comfortable holding Bradys and so we do not expect to see any more swaps. The 2015 bond is now at $1.1bn, which gives it substantial liquidity.

  • 26 Sep 2002

All International Bonds

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 JPMorgan 92.59 388 8.96%
2 Citi 85.30 278 8.25%
3 BofA Securities 63.15 265 6.11%
4 Barclays 58.01 223 5.61%
5 Deutsche Bank 55.74 184 5.39%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 BNP Paribas 60.87 123 14.06%
2 Credit Agricole CIB 28.59 93 6.60%
3 Santander 25.41 90 5.87%
4 JPMorgan 23.88 61 5.52%
5 UniCredit 21.51 103 4.97%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $bn No of issues Share %
  • Last updated
  • Today
1 Goldman Sachs 2.07 11 10.42%
2 BofA Securities 1.40 6 7.01%
3 Citi 1.37 7 6.87%
4 Morgan Stanley 1.36 6 6.85%
5 JPMorgan 1.31 7 6.59%