Today, 30 November 2004, the mayor of Shoumen, Veselin Zlatev, signed an agreement for the underwriting of municipal bonds issue with the investment firm Elana Trading - Sofia.
The total value of the issue is 4 million leva (2,045 million Euro). There will be 4,000 bonds distributed, each with a nominal and issued value of 1,000 leva. The bonds bear an annual interest rate of 8.7%, paid ever six months with maturity five years. The outline for principal payment will be three equal payments in the second half of the third, fourth, and fifth years.
The broker will organize and perform the initial private offering. The initial offering is 14 February 2005 and the last will be 18 February 2005. After the conclusion of the initial bond offering, there will be the opportunity to trade the issuances for those who register for trading with the Bulgarian Stock Exchange.
The borrowed funds will be invested in the reconstruction and rehabilitation of the road network.
The benefits of this municipal bond issue for the Municipality will be building municipal credit history and to earning a favorable credit rating for the town; with this, we will become more attractive for Bulgarian and foreign investors. Also, with this financial instrument, we will solve the difficult problem of surfacing the roadways.
The Municipality of Shoumen will be the eighth town in the country - after Pazardjik, Svishtov, Sliven, Dupnitsa, Dobrich, Varna, and Sofia - to issue municipal bonds.