SOFIA, Feb 18 (Reuters) - Bulgaria has picked Citi, JP Morgan Chase &Co and two more banks to lead manage bond issues of up to 3.9 billion levs ($2.22 billion) on global markets this year, two market sources familiar with the process said on Thursday.
The Balkan country needs the proceeds to finance its fiscal gap estimated at 2 percent of gross domestic product and set aside liquidity buffers that may be needed after banks undergo stress tests later this year.
“The finance ministry has chosen four banks to organise one or several bond issues, pending market conditions this year,” one source who asked for anonymity said.
“Citi and JP Morgan are two, and the other two chosen are European banks,” a second source said.
The finance ministry declined comment, but confirmed in a statement to Reuters it has undertaken steps to secure the possibility to raise up new debt abroad in line with budget law limit of 3.9 billion levs.
“The ministry has undertaken measures to secure the possibility to raise debt under the mid-term debt programme, including selection of lead managers and update of the necessary documents,” the ministry said in a statement to Reuters.
Bulgaria is the European Union’s poorest but also one of its least indebted members. The finance ministry sees the country’s debt to output ratio to reach 28 percent this year from 26.4 percent at the end of 2015.
Sofia tapped global markets last March, when it raised 3.1 billion euros in its-biggest ever debt sale.
Rating agencies Fitch and Moody’s rate Bulgaria at investment grade BBB- and Baa, respectively, while S&P keeps the country’s credit rating at BB+ after it cut it to junk in 2014 following a banking crisis. ($1 = 1.7575 leva) (Reporting by Tsvetelia Tsolova; Editing by Toby Chopra)
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