The assessment of the planned Brady-Eurobond exchange depends on details, which are yet to be clarified and the success of the deal on the market, Piritta Sorsa, Resident Representative of the International Monetary Fund, said. She pointed out that IMF supports all moves on the debt management, which comply with the goals, described in the memorandum with the Government. In the next several years the payments on the debt from the budget will increase, she said. In the opinion of Piritta Sorsa the new eurobonds with fixed interest rate, which will be floated in two issues, one in euro, and another one in dollars will have a positive effect.

According to the analysis of IntelliNews the government strives to improve its image abroad by running away from Brady bonds. It reportedly tried to take advantage of the fact that the news for the exchange triggers rise in the price of the Brady bonds. The operation faces serious risks if the demand for dollar-denominated bonds exceeds the demand for Euro bonds, the Agency claims. In this case, the analysis continues, the Government will fail to achieve one of its primary goals- increasing the euro-debt at the expense of the debt in dollars.

Yet another risk is poised by the investors. According to the analysis the Brady bonds are a combination of American bonds risk plus Bulgarian risk, while the new Еurobonds pose only Bulgarian risks. Their price will depend on the investors’ assessment of the situation in Bulgaria.
Parliamentary attacks against the exchange are another realistic threat. A survey of IntelliNews shows that the United Democratic Forces will vote against the exchange, the Movement for Rights and Freedoms will support it, while Coalition for Bulgaria will insist on more information before declaring its stand. It is expected that during the debates accusations of corruption will abound. The Agency points as highly probably the possibility of President Parvanov vetoing the parliamentary decision.

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