Trends and Determinants of Bulgaria’s International Debt Securities Financing

The paper analyzes the specific features of the financing of Bulgarian economic agents through the international debt securities market (IDSM). The time period is from the 3rd quarter of 1989 to the 1st quarter of 2017. The study entails two stages of analysis. The first stage identifies and analyzes the trends including the amount of debt denominated in international securities, the choice of market segment, the interest rate structure and the currency structure. The second stage identifies and analyzes the determinants that stand behind the trends. The two-stage analysis is further divided in three different sections for each stage, dedicated to the three sectors: the general government, the financial corporations and the non-financial corporations. Four hypotheses are tested. The first one, that the public sector has the leading role in respect to the amount of financing received from the IDSM, is accepted. The second one - that since Bulgaria is a small open economy, the three sectors participate actively in the international money and bond markets, is rejected. The third one, that Bulgarian economy is financed predominantly through the IDSM by issuing fixed interest rate instruments, is accepted. The fourth one, that the implementation, the functioning and the exit strategy of the currency board in Bulgaria determine the choice of the euro as a currency of denomination of the Bulgarian debt issued on the IDSM, is also proven to be true.