site.btaBulgaria Issues EUR 1.9994 Bln 7-Year and 12-Year Dual Tranche Bonds

Bulgaria Issues EUR 1.9994 Bln 7-Year and 12-Year Dual Tranche Bonds

Sofia, March 15 (BTA) - On Monday, March 14, Bulgaria successfully issued a 1.994 billion euro dual tranche Reg S Senior Unsecured transaction, the Finance Ministry said in a press release on Tuesday. The deal consisted of a 1.144 billion 7-year and a 850 million euro 12-year tranche. The 7-year tranche was priced at 98.192 euro with a 1.875 per cent coupon at a spread of 185 basis points over mid-swaps (MS) (2.156 per cent yield), while the 12-year tranche was priced at 98.237 euro with a 3.000 per cent coupon at 235 basis points over mid-swaps (3.179 per cent yield).

BNP Paribas, Citi, JP Morgan and UniCredit acted as Joint Lead Managers and Bookrunners for the transaction.

Taking advantage of favorable market conditions after extensive easing measures announced by the European Central Bank (ECB) at its Governing Council meeting last Thursday, the parties decided on a swift intra-day execution strategy. Initial price talks were announced at London open at MS+205 basis points for the 7-year and MS+245 basis points for the 12-year tranche, with sizes set at Benchmark.

Books were building steadily, reaching a combined size in excess of 2.6 billion euro by 11:45 am UKT, when guidance was released at MS+195-200 basis points for the 7-year and MS+240 basis points area for the 12-year tranche. The books have shown resilience to the tightening and continued growing before going subject at 1:30 pm UKT. Final spreads were set at MS+185 basis points for the 7-year and MS+235 basis points for the 12-year. Final tranche sizes were determined shortly after at 1.144 billion euro and 850 million euro, respectively. The size and quality of the orderbook allowed the Republic to reach the maximum combined size targeted prior to the transaction.

Final orderbook reached 2.1 billion euro from 195 accounts on the 7-year, and 1.5 billion euro from 155 investors on the 12-year tranche.

Demand came from across whole Europe, with fund managers and banks dominating in both tranches. The transaction marks the largest euro-denominated deal out of the Central and Eastern Europe, Middle East and Africa region this year-to-date, and the first euro-denominated Sovereign issuance since the announcement of the ECB's new stimulus package last week. It is also worth mentioning that Bulgaria achieved the lowest coupon ever in the international bond market with the 7-year offering. Current dual tranche transaction has increased Bulgaria's outstanding maturities to seven bonds, establishing a well populated euro curve for the Republic.