Bulgaria is selling a EUR 1.994 B dual-tranche bond, Reuters reported on Monday, citing a lead manager.

The transaction comprises a EUR 1.144 B seven-year tranche and a EUR 850 M 12-year tranche, the newswire said.

Demand from investors was large enough for the Bulgarian government “to cut initial yields on its first benchmark-sized Eurobond in a year,” Bloomberg noted in its coverage of the news.

The seven-year bonds have been launched at 185 basis points above the euro mid-swap rate, compared with initial guidance of about 205 basis points. The 12-year tranche has been offered at 235 basis points, compared with guidance of about 245 basis points, Blomberg said citing a source with knowledge of the matter.

Bulgaria will be able to borrow up to BGN 5.3 B (EUR 2.7 B) in fresh debt in 2016 to finance budget deficit, repay old debt and support recovery and restructuring programmes in the banking sector, if they are needed after a stress test of the country's banks.

The country’s government debt totalled EUR 11.61 B at the end of 2015, increasing from EUR 11.30 B a the end of the previous year.

Bulgaria sold a record EUR 3.1 B triple-tranche bond comprising of seven-, 12- and 20-year maturities to international debt investors last year.

BNP Paribas, Citigroup, JP Morgan and UniCredit are lead managers of the bond sale.