site.btaBank Deposit Insurance Fund to Repay Lv 1,145 Mln to State Next Week, Lv 530 Mln Remain to Be Paid

Bank Deposit Insurance Fund to Repay Lv 1,145 Mln to State Next Week, Lv 530 Mln Remain to Be Paid

Sofia, December 13 (BTA) - In the beginning of next week the Bank Deposit Insurance Fund shall make a partial preliminary payment to the amount of 1,145 million leva to cover the state loan, the Ministry of Finance said Tuesday. The loan was extended from the national budget under an agreement concluded between Bulgaria and the fund on December 3, 2014, to pay the guaranteed deposits at Corporate Commercial Bank (Corpbank) AD after its licence was withdrawn.

To this end the fund shall absorb 298.5 million euro of the state guaranteed loan extended by the European Bank of Reconstruction and Development and 250 million euro extended by the Interational Bank of Reconstruction and Development (World Bank), while own resources of the fund will be used for the remainder to the extent of 72.227 million leva.

This will enable the fund to streamline the structure of its financing and to reduce the costs of its financing significantly in terms of interest and the term of the maturity of the loans and diversification of the funding sources, the press release said.

The prepaid amount of 1,145 million leva remains available in the fiscal reserve in the medium term and the resource can be used for repayment of liabilities.

The fund recalls that the amount of the loan under the agreement is up to 2,000 million leva of which it has used 1,675 million leva. The interest is fixed at 2.95 per cent and the interest payments are made annually on April 15. The lump sum will be paid on April 15, 2020, with an option for full or partial early repayment. The total amount of interest paid on the loan during 2015-2016 was 65,987,054.80 leva. After making the partial early repayment the fund also plans to repay the outstanding principal to the amount of 530 million leva also before the maturity of the loan, the press release said.