Eurobank Analysts Remain Positive Towards Bulgarian Eurobonds

Eurobank analysts issued an assessment report on Bulgaria's economic status and future prospects stating that Bulgaria was one of the best performers within EMBI+ components during the recent EM sell-off outperforming other lower-rated constituents of the index, reinstating its defensive nature, sound fiscal policy adding that the country has made significant progress on reforms implementation in accordance with EU demands.

Specifically, on the reforms front, following the European Commission’s annual progress report on Bulgaria last October, Parliament has passed a number of laws, including a new Penal Procedure Code and legislation allowing confiscation of criminal assets.
Up to this point, a greater portion of the 2005 Action Plan for EU-related reforms has already been passed and the approval of the remaining legislation is likely in due course.

However, full implementation of the reforms will probably prove challenging.

Nonetheless, the European Council is likely to decide this June to allow Bulgaria to join the EU on January 1st 2007.

In other related news, Moody’s recently upgraded Bulgaria’s FX sovereign rating by one notch to investment grade (Baa3), bringing it in line with existing ratings by the other two major agencies.

Eurobank analysts remain constructive towards Bulgarian Eurobonds multi/month (EMBIg Burgaria sovereign spread at 80bps at the time of writing) in view of the country’s improved EU prospects and Bulgaria’s sound fiscal position.lemontreevillas.com