Bulgaria approves €1.49bn bond issue

Bulgaria is to raise nearly one and a half billion euros on the bond market to repay debt and finance the budget, parliament agreed on Friday.
The decision came amid political uncertainty in the country -- the poorest in the European Union.
Parliament approved the issue of bonds to raise 1.49 billion euros ($2.04 billion) to refinance maturing debt and cover the budget deficit.
The move comes amid concerns about political instability, since the technocrat government's two main backers -- the Socialists and minority MRF party -- have called for early elections.
Earlier this month, the government hired Citigroup, HSBC Bank and JP Morgan Securities to manage the issue, which will be either euro- or dollar-denominated and could be printed in one or more packages, although the timing was still undecided.
The money raised will be used by the government to repay a $1.1-billion debt issue maturing in January 2015, finance the country's 2014 public deficit of 1.8 percent of gross domestic product, and to pay debt interest.
Bulgaria, which is not part of the eurozone, has one of the lowest public debt ratios in the European Union, at just 18.6 percent of gross domestic product in April, according to central bank data.
Since 1997, the country has operated under a currency board arrangement which ties its lev to the euro, and tightly restricts monetary policy, notably the creation of new money.
The country last tapped the international markets in July 2013 to refinance a 879-billion-euro bond issue.
But public finances are an extremely sensitive issue in the country and the new bond issue prompted the conservative opposition GERB party to table a no-confidence motion in parliament against the government's fiscal policy on Thursday.
It is due to be put to the vote next week but stands little chances of success.