Bulgaria to raise 1.3 bln euros in foreign debt this year: sources

By Tsvetelia Tsolova

SOFIA, Nov 18 (Reuters) - Bulgaria wants to raise about 1.3billion euros ($1.6 billion) in bridge financing from foreignbanks by the end of the year, to be refinanced by global bondsin 2015, three sources familiar with the plans told Reuters.

The Balkan country, one of EU's least indebted members,needs to raise 4.5 billion levs ($2.9 billion) in 2014 to plugits budget gap and prop up the banking system after the collapseof Corporate Commercial Bank.

Foreign banks including Citigroup and Unicredit, Societe Generale, Deutsche Bank and HSBC have shown interest in providing bridgefinancing, the sources told Reuters.

Other potential bidders for the loan, which should be agreedin the next two to three weeks, include Intesa Sanpaolo, BNP Paribas, KBC and Raiffeisen, two of the sources said.

A third source also said JP Morgan and Bank ofAmerica could take part, adding that the financeministry is likely to name the banks later this week.

"The bridge financing amount is a serious sum for commercialbanks, so it will be a syndicated effort by four or five banks,"one industry source said, declining to be identified.

"The loan is necessary, as there is not enough time to tapglobal markets this year, but the finance ministry will probablyhave to do that in the first half of next year," the sourcesaid.

The government plans to raise another 2 billion levs on thelocal market.

Bulgaria needs to lend its Deposit Insurance Fund some 2billion levs to cover guaranteed deposits at Corpbank.

Another 1 billion levs will be used to refinance governmentsupport to First Investment Bank, the third biggestlender, which was caught up in the panic.

Bulgaria's new government needs parliament's approval toraise the deficit target to 3.7 percent and raise new debt.Parliament is expected to take an initial vote on later onTuesday.

"We will ask the parliament to allow us to hold talks andarrange the raising of new debt so that we can act swiftly oncethe amendments of the 2014 budget are finally approved", thefinance ministry spokeswoman told Reuters. (Editing by Matthias Williams/Ruth Pitchford)