28.05.2013

The Ministry of Finance reopened for a fourth time the 10.5-year GS issue with maturity 9 July 2023. At the auction held on 27 May the yield achieved is 3.43%, which is by 20 b.p. lower compared to the previous reopening of the issue in March this year. The coverage coefficient is almost 2, the volume offered for sale being BGN 50 million, while the primary dealers subscribed BGN 99.84 million. After the last auction the issue totals BGN 200 million.

The largest volume of GS acquired banks - 44.72%, followed by insurance companies - 25.40%, pension funds - 20.68%, investment intermediaries - 6% and other investors - 3.20%. In 2013 the issue is a benchmark one regarding the harmonized long term interest rate for evaluating convergence (Maastricht criterion).

The yield achieved at the auction is lower than the yield on sovereign bonds with similar characteristics of EU Member States and countries from the region: Turkey (6.21%), Slovenia (5.77%), Portugal (5.45%), Hungary (5.03%), Romania (4.86%), Spain (4.29%), Italy (4.10%), Ireland (3.50%) and others. The yield on the Bulgarian sovereign bond is comparable with that of Lithuania and Poland. Moreover, the yield achieved at the auction is lower than the long term interest rate for evaluating Bulgaria's convergence for April 2013, which is 3.47%.