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SOFIA, Jan 8 (Reuters) - Bulgaria plans to tap globalmarkets in the first half of this year and then again in theautumn to finance its fiscal deficit and roll over existingdebt, the finance minister said on Thursday.
The Balkan country, reeling from its biggest banking crisissince the 1990s and facing sluggish economic growth this year,plans to raise 6.9 billion levs ($4.2 billion) from foreignlenders in 2015.
Vladislav Goranov said the government was not in a rush toraise funds, but believed that markets would be relatively moreliquid at the beginning of the year.
"Both the markets and the government are liquid enough atthis moment, so there is no pressure... We expect good resultson yields, meaning Bulgaria gets cheap financing," Goranov said.
Borrowers such as Bulgaria have benefitted from years whenmajor central banks have pumped out cheap money, encouraginginvestors to seek higher yields in emerging markets, but thattide is turning as the U.S. Federal Reserve moves to tighten itspolicy.
Ratings agency Standard and Poor's cut Bulgaria's sovereigncredit rating to junk, to BB+ from BBB-, in December, citingweaknesses in its domestic banking system.
However, Fitch and Moody's still rate Bulgaria just insideinvestment grade.
Bulgaria plans a fiscal deficit of 3.0 percent of grossdomestic product this year. It also needs to roll over a 1.5billion euro loan it took in December to prop up the bankingsystem after the collapse of Corporate Commercial Bank -- the country's fourth largest lender.
Citi, HSBC and the local units of SocieteGenerale and Unicredit, which provided the1.5 billion euro bridge financing loan last month, are toarrange the pending bond issue in the first half of the year.
The new borrowing will bring Bulgaria's public debt to 28.4percent of economic output this year, up from 18 percent in2013, but it will remain among the EU's least indebted members.
The government extended 2 billion levs to the DepositInsurance Fund in December to ensure it pays out guaranteeddeposits at Corpbank, which are estimated at about 3.6 billionlevs in total.
The Fund has already paid out 3.3 billion levs and washolding talks with international credit institutions and banksto refinance its debt to the state, its chairman RadoslavMilenkov said. ($1 = 1.6617 leva) (Reporting By Tsvetelia Tsolova; editing by MatthiasWilliams/Ruth |Pitchford)