The heavily-indebted BDZ, which is facing a nationwide strike by its 14,000 workers, stopped paying instalments in 2010 and has now broken a clause in the contract by changing its insurer, the mass circulation Trud daily said.
The 50 diesel and electric trains, which were leased in 2003, form the only modern component of Bulgaria's creaking fleet of trains, with the bulk of locomotives and rolling stock dating back to the communist era.
BDZ was not immediately available to comment on the report as the company's management was holding a new round of talks with the trade unions on Friday in a bid to prevent the strike.
A failure to resolve the problem with KfW would "blow to pieces" the whole schedule of the railways since the new trains are vital for commuters around the European Union country's main cities, Trud reported.
The government of Prime Minister Boyko Borisov aims to split BDZ and privatise the cargo operations, which is the only profitable area.
The firm currently has debts of 771 million leva (€394 million, $529.6 million), according to the finance ministry.