Bulgaria’s Finance Ministry is in talks over fresh borrowing on international markets to finance increased spending under a 2014 budget update now before parliament, BNR radio reported on Monday.

Several options for raising up to BGN 4.5 B (EUR 2.3 B) via domestic and foreign debt financing are under consideration.

The new borrowing will most likely be made via a syndicated loan from several banks as issuing bonds on international markets needs more time to prepare, BNR said.

In addition, if Bulgaria offered a bond issue to international investors around Christmas, this will be perceived as a signal the government urgently needs money, which will increase  borrowing costs.

The Finance Ministry has declined to mention potential lenders by name to avoid influencing the market, BNR said.

Another reason is that the ministry hasn’t been formally authorized to launch loan negotiations with foreign financial institutions as the draft budget revision prepared by the minority coalition government has yet to be approved by Parliament to take effect. Parliament is expected to vote on the draft on first reading on Tuesday.

Finance Minister Vladislav Goranov said last week that Bulgaria was likely to seek EUR 1.0-1.5 B (BGN 2.0-3.0 B) in bridge financing from foreign lenders as part of the planned budget update. The remainder is to be raised on the domestic market, most likely by issuing government securities.

The government is proposing to allocate BGN 1.6 B of fresh borrowing to financing budget deficit and BGN 900 M to providing liquidity support to local banks in case of need.

Bulgaria’s Deposit Insurance Fund will get BGN 2.0 B to repay state-guaranteed deposits with Corporate Commercial Bank, or KTB, which had its banking licence revoked earlier this month.