The International Monetary Fund dashed to put together an unprecedented credit line worth billions of dollars to satisfy the urgent need for foreign capital tormenting developing markets and potentially Bulgaria.

The IMF will throw hefty three- or six-month dollar lines of credit at softer requirements to stave off economic and currency disaster at the countries left out of the safety nets of the Fed and the ECB.

Sofia was adamant it does not need foreign help and denied reports by the Economist that it is in talks with the IMF.

Sources say Bulgaria may grab a USD 2 billion credit line after Ukraine reached a 24-month agreement with the IMF on a USD 16.5 billion loan under a 24-month stand-by arrangement.

The IMF can lend some USD 240 billion to struggling economies and prop up withering currencies but major central banks can also join in.

Washington denied it is weighing a USD 1 trillion rescue package but Japan, a few oil production countries and the Fed have said they were ready to back the project.

The New York Times put Bulgaria, Romania, Hungary, Ukraine, the Baltic States and Turkey on the list of threatened countries, where leaders say there is nothing to be scared of. The safety measures adopted by Western countries have added to the woes making their own banks seem more secure.

The Economist said in a reported the crisis is posing a major threat for the EU’s poorest countries Bulgaria and Romania and warned a property bubble burst and a wave of corporate failures might put their banking systems at risk. Bulgaria is unlikely to get foreign help for its failure to stem organised crime, according to the publication.

The EBRD is mulling over giving loans or buying more shares of banks it has stakes in the region, said president Thomas Mirow.

Bulgaria, Turkey, Romania and Croatia will fail to attract foreign funding over their low sovereign credit ratings.

Last week rating agency Standard & Poor’s placed Bulgaria's 'BBB+/A-2' foreign and local currency sovereign credit ratings on credit watch and said the country’s credit market is unstable and is facing a sharp slump in foreign funding.

All the while the Bulgarian government is vigorously denying there is any trouble brewing down the road.

The prudent macroeconomic and fiscal policy has equipped Bulgaria with sufficient reserves so as not to have to knock at the doors of the European Commission, the IMF, the ECB or any other institution, finance minister Plamen Oresharski said Friday.

The Bulgarian economy should be stopped from cooling off or else foreign investments will fall and the economy may be in for a shock landing, said economic committee chairman Yordan Tsonev.

(Dnevnik)

The Bulgarian communications regulator CRC has set dates for new tenders for a fourth and a fifth GSM operator, chairman Veselin Bojkov told Dnevnik.

The regulator will auction off on December 10 two 15 megahertz bands in the 1800 megahertz spectrum. The procedure for two 10 megahertz bands will take place on December 17.

Tender papers will be available for purchase until November 24.

Bojkov said two or three companies have expressed interest in the tender but declined to name them until they have bought documents.

“I’m afraid the ongoing financial crisis will generate weaker interest because a licence requires fresh cash, but then only serious players will show up,” said Bojkov.

Liechtenstein-registered Telco AG, which was the only bidder at the previous procedure, is alleged to be eying a permit again.

Krasimir Stoychev, executive director of local WiMAX telecom operator Max Telecom, voiced doubts the tender will attract any big company but vowed to buy papers.

This will be the commission’s second go at handing out idle frequencies after the July 29 procedure was cancelled for drawing a single bidder with bad paperwork.

The Bulgarian mobile services market nursing Mobiltel, Globul, Vivatel and Mobikom topped BGN 2.1 billion in 2007 making 61% of the total telecoms market, under regulatory data.

(Dnevnik)

Two funds listed on the alternative segment of the London Stock Exchange said they would slash real estate investments in Bulgaria as the ongoing financial crisis is having its toll on the market.

Black Sea Property Fund gave up its Evergreen gated complex due to sprout in the Bulgarian capital, while Bulgarian Land Development dashed out of flats in the Paradiso Verde 2 complex.

Sofia’s housing segment has not yielded to the crisis yet but credit is tight and some other segments are saturated, Black Sea Property Fund said in a statement.

The fund pointed out it had steady cash resources and would revise its Sofia project to pick the most efficient time and the way to use them.

BLD cut to 55 from 100 the flats it bough off-plan 30% cheaper than market price in the Paradiso Verde 2 project worth EUR 3.7 million.

A large portion of the fund’s portfolio is focused on the holiday segment, which is feeling the full force of the financial crisis with supply much bigger than demand, analysts say.

Meanwhile, the Sunday Independent reported Irish homeowners are trying to shed Black Sea properties even at a lower price.

(Dnevnik)

Bulgaria’s National Assembly voted at first reading Friday on extending bank deposit insurance to the local-currency equivalent of EUR 50,000 from BGN 40,000 at present.

The MPs approved bills of Rumen Ovcharov, Milen Velchev and Yordan Tsonev of the ruling coalition and of independent Maria Kapon.

Kapon proposed a guarantee of the local-currency equivalent of EUR 50,000 mirroring the measure put forward at the latest meeting of the EU’s finance ministers to protect deposits of up to EUR 50,000.

The members of the ruling coalition called for a BGN 100,000 insurance.

Under the adopted legislative changes, the government will also guarantee debt instruments issued by the local commercial banks.

The deposit insurance fund will borrow from the state budget if short of cash and guarantee interbank loans for a year, under the proposal.

The Bulgarian government is ready to guarantee interbank loans and buy back government securities to help banks overcome the credit crunch and the smaller liquidity, Prime Minister Sergei Stanishev told Reuters news agency.

Stanishev pledged the government would bail out any bank suffering liquidity problems, and said the fiscal reserve would surge to BGN 13 billion at the year’s end.

(Dnevnik)

Global agency Standard & Poor’s placed under review with a negative outlook the ratings of Bulgaria’s biggest bank, UniCredit Bulbank, and the market’s number three by assets, United Bulgarian Bank, Bloomberg reported.

The move follows placing Bulgaria’s sovereign credit rating on credit watch negative because of increased vulnerability during the ongoing global financial crisis.

UniCredit Bulbank CEO Levon Hampartzoumian told Dnevnik the rating action was not prompted by the lender’s operations but comes as its rating is restricted by the country’s.

Standard & Poor’s kept unchanged Bulgaria’s credit rating of BBB+/A-2 on foreign and local currency sovereign debt.

Bulgaria’s eight-month current account gap widened to a record 14% of GDP as foreign investments worsen, Bloomberg reported.

(Dnevnik)

Bulgaria’s industrial conglomerate Chimimport, the biggest listed holding company, will target to add some BGN 200 million to its capital by issuing up to 50 million shares, the company said.

The stocks’ issue price and number are yet to be announced, and the proceeds will back Chimimport’s investment strategy.

The company was not immediately available to comment.

Sources say Chimimport will seek to pump fresh cash into its subsidiaries Central Cooperative Bank and insurer Armeec.

The lender stomached a portion of its owner’s latest capital rise of BGN 150 million from BGN 130 million.

“The stock issue does seem quite sizeable at the backdrop of market stagnation but I believe the management has thought it out and it will be successful,” said Petko Valkov, executive director of BenchMark Asset Management. He added major institutional investors holding minority stakes in the company may also join in.

Analysts say a major strategic partner may buy into Chimimport unable to by directly over the small liquidity.

(Dnevnik)