Bulgaria is currently among the fastest growing economies in the European Union. Since EU membership was obtained in January 2007, the country has experienced high levels of interest form foreign investors, and FDI for 2008 is expected to reach 16.5% of GDP. The country’s low corporate and personal income tax rate of 10% is a prerequisite for higher returns and creates incentives for increased reinvestment. The M&A market is developing at a steady pace, with many strategic and financial investors entering the market. Investment is mainly driven by:

Strengths

• The economy is booming in a stable political environment, leading to a steady increase in consumers’ purchasing power
• GDP per capita is expected to grow by more than 67% between 2006 and 2010
• The Bulgarian Lev is pegged to the EUR and the currency board is to remain until ECM entry, which is expected in 2014
• Government has policy of Budget surpluses and reduction of public debt
• Corporate tax is the lowest in EU at 10%
• Bulgaria has established itself as a strong regional economic leader
• One of the fastest growing economies of EU and SEE
• Regional leader in FDI

Risks

• Bulgaria may indirectly be affected by the current financial crisis due to its big current account deficit and predominant export to EU countries

Raiffeisen Investment initiated its investment banking operations in 1995, making it the first foreign provider of investment banking advisory services in Bulgaria.

In its early days Raiffeisen Investment Bulgaria was involved in the privatisation of 24 food companies, several tourist resorts on the Black Sea and the privatization of assets in the Bulgarian steel industry. Based on this achievement Raiffeisen Investment is considered the number one privatization advisor in Bulgaria.

More recently, Raiffeisen Investment Bulgaria is active in M&A transactions in the energy, telecommunication, media, consumer retail and heavy industry. Currently Raiffeisen Investment Bulgaria is trying to advise clients on many projects of national and regional importance. Raiffeisen Investment has been an advisor to Delta Maxi Group in acquiring Piccadilly (chain of food stores), to Telecom Austria in acquiring Mobiltel (the first mobile operator in Bulgaria) and to AIG Capital Management in acquiring the Bulgarian Telecommunications Company.

In 2008 Financial Times magazine “The Banker” awarded Raiffeisen Investment Bulgaria with the Deal of the Year Award for its advisory work on the acquisition of BTC by AIG Capital Management.