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Conversion of Bulgarian Brady Bonds: Five Years After


  • Garabed Minassian


In 2002 Bulgaria performed some operations with its government external debt. These operations were unique in its history in terms of their size. In spring, two types of global bonds were issued - for EUR 535.5 million and for USD 513 million. During the fall of the same year there followed another issue of global bonds for USD 759 million. Those global bonds were used to buy back and exchange the Brady bonds already in circulation. The managerial team acted trying to get a financial advantage of the operations carried out. Five years later one can draw up a complete balance of the outcomes. They are disastrous for Bulgaria. Not a single hypothesis of the managerial team has been confirmed. The projections were carried out unprofessionally and incompetently. On the other hand, however, the counterparts (investors) could not have lost. In the end, the country has paid about one billion EUR more to service its external debt.

Suggested Citation

  • Garabed Minassian, 2007. "Conversion of Bulgarian Brady Bonds: Five Years After," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 7, pages 3-26.
  • Handle: RePEc:bas:econth:y:2007:i:7:p:3-26

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    References listed on IDEAS

    1. Bulow, Jeremy & Rogoff, Kenneth, 1990. "Cleaning Up Third World Debt without Getting Taken to the Cleaners," Journal of Economic Perspectives, American Economic Association, vol. 4(1), pages 31-42, Winter.
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    JEL classification:

    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems


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