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Bulgaria,United Kingdom,United States : SOFIA: EBRD & BDIF inked a loan pact worth EUR 300m.

The Bulgarian Deposit Insurance Fund (BDIF) on Thursday has accomplished the signing of an agreement with the European Bank for Reconstruction and Development (EBRD) to secure a EUR 300 million in loan.

The deal signing event has taken place in the Bulgarian capital city of Sofia.

In a statement, the Ministry of Finance, Government of Bulgaria, has revealed that the loan, with a nine-year maturity term and a grace period of six years, will stock up reserves of the BDIF to facilitate a greater financial independence and sustainability in the long run to the economic strength of the Fund.

In a release, the EBRD stated, "The loan will be conditional on the accomplishment of steps undertaken by BDIF in light of the new legislation frameworks for deposit insurance and bank recovery and resolution, implemented in mid-2015 to transpose requirements of the respective EU directives."

The BDIF Board Chairman Radoslav Milenkov has signed the funding deal with the EBRD Regional Director (Bulgaria and Romania) Matteo Patrone in Sofia.

The Bulgarian Finance Minister Vladislav Goranov has signed a separate loan guarantee agreement with the EBRD official, which will be implemented upon receipt of approval from the Parliament.

The loan represents "a landmark investment for the EBRD as it supports the development of the local banking market infrastructure," stated Matteo Patrone in the EBRD release.

The BDIF last week has secured approval from the Washington-headquartered World Bank for a EUR 300 million worth of loan.

The BDIF has utilized most of its reserves to support assets worth quite a few billion dollars of the customers deposited at the bankrupt Corporate Commercial Bank (KTB).

KTB became insolvent in the year 2014.

As of last December, the BDIF had BGN 486 M (EUR 248 M) in resources, bulk of which in the form of government securities. The Bulgarian Government has revealed that it is in need of EUR 500 million in total to ascertain firmness in the countrys banking system in the long run.

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Publication:Mena Report
Geographic Code:4EXBU
Date:Mar 25, 2016
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