Банкеръ Weekly



Central Cooperative Bank (CCB) is the sixth local credit intitution to issue its bonds. By December 16, 2002 - the deadline for the purchase of debt instruments issued by it, investors can place their orders in the bank's head office. CCB has announced it would satisfy demand up to BGN5MN, but it would be hardly sufficient to meet investors interest, having in mind the high yield which the financial institution offers for its mortgage bonds. The bonds' par value is BGN1,000 apiece, the term of maturity is two years, and they bear an annual interest rate of 8%, which is the highest ever offered by a local credit institution. The yield shall be paid each six months (twice a year); the first payment will be probably effected on May 16, 2003. The issue will be regarded as successful if subscription is made for at least BGN3MN of its paper by the deadline - December 16.In addition to the high yield, the very good coverage of the mortgage bonds is among the factors, expecetd to draw investors' attention to the issue. It is in compliance with legal requirements, according which the value of mortgage covered by the securities should exceed 10% of their face value. The bonds are guaranteed by mortgage of housing for which CCB has extended 71 loans (in US dollars and euro). All of them have been qualified as regular and the unpaid principal exceeds BGN12MN. About 45% of the motgaged housing is in Sofia, and the remaining 55% - in Plovdiv, Bourgas, Varna, and Dobrich. The maturity of the extended loans varies between 15 and 57 months. The total amount of unrepaid part of these housing credits is 64.7% of the price of real estates, pledged as guarantee. This makes them easy to sell. The finances, which the bank will get from the sale of the mortgage bonds will be used for launching new credits.

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