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Bulgaria picks Deutsche Bank/Raiffeisen to arrange loan

SOFIA, Oct 30 (Reuters) - Bulgaria has picked Deutsche Bank and Raiffeisen Bank International to raise up to 360 million euros via a Schuldschein loan, a government source said on Wednesday.

Finance Minister Petar Chobanov had said previously that his ministry had picked a consortium of banks to organise the loan, which resembles a bond as the banks sell it institutional investors, but is not a security and is not traded on the stock exchange.

"Deutsche Bank and Raiffeissen were chosen (as the lead managers) for the Schuldschein loan," the source with direct knowledge of the process, told Reuters.

The finance ministry declined to comment, saying all details linked to the loan, including maturity and interest rates will be made public when it is sent to parliament for approval.

Bulgaria will use the traditional German debt instrument for the first time and the government opted for it over a Eurobond due to the limited amount of time it had to organise the borrowing.

The Socialist-led cabinet in August raised its fiscal deficit target for this year to 2 percent of gross domestic product from an initial 1.3 percent.

The Balkan country will tap international markets next year, as it needs to refinance $1.1 billion in global bonds, maturing in January 2015, its 2014 budget draft showed. (Reporting by Tsvetelia Tsolova; editing by Patrick Graham)