Insurance against the failure of Bulgaria rose sharply after the agency Standard and Poor's downgraded the country to the extent "junk", or " junk." Quotes 5 -year CDS- and dollar exceeded 192 points since the beginning of the month they rose by more than 30 % ( Figure 1) . For comparison - insurance against the failure of neighboring Romania are trading at 143 points and the trend in them for the last month of decline , according to data compiled by Bloomberg.
Upward movement starts from the beginning of December because of news for many debt that Bulgaria plans to issue , but shoots further after news of the rating , analysts explained .
According to financial experts largely those negative movements are due to the rating downgrade . On 12 December S & P corrects vision for Bulgaria from BBB- to BB +, which is the second downward revision this year . The reason for this are the problems in the financial sector caused by gaps in oversight that led to the need for state aid to the third and fourth largest banks.
On the one hand, the low rating indicates that the risk increases that the state does not fulfill its commitments to creditors . On the other , falling from the scale of investment ratings forcing large institutional investors to dispose of their Bulgarian bonds , as they are obliged to invest its assets in premium instruments.
Impact on the market assessment, and Bulgaria have global events such as the collapse of the ruble and the decrease in oil prices . They drive investors to make massive sales that squeeze prices of risky assets.
According to experts, if the deterioration in the attitude towards Bulgarian financial instruments continued in the coming months , the government will be difficult to issue bonds at favorable rates to refinance the bridge loan drawn at the end of this year to finance the budget deficit and repayment of deposits of KTB .