22.04.2013

The Ministry of Finance held an auction for the sale of 5-year government securities denominated in BGN and maturing in January 2018. The auction was successful in the two key indicators measuring investor confidence, i.e. dropping yield and strong investor interest. This fourth reopening of the bond since the start of the issuing 2013 reached a yield of 1.90% for the total approved quantity of government securities of BGN 50 million against the offers placed for BGN 161.75 million, which corresponds to a bid-to-cover ratio of 3.24.

Just for comparison, the auction held on 21 January 2013 reached a yield of 1.66%, the yield of the auction on 18 February 2013 was 1.99% and that of the auction held at the end of March 2013 was 2.29% respectively. The yield of this bond is significantly lower than the current bond yield of a number of EU members: Slovenia - 5.27%, Portugal - 4.56%, Hungary - 4.89%, Croatia - 3.85%, Romania - 3.51%, Spain - 3.31%, Italy - 2.93%, Ireland - 2.40%.

The auction reported extremely high interest from a large range of investors, i.e. banks, pension funds, insurance companies, trusts and guarantee funds. Banks acquired the largest share of GS - 53.30%, followed by pension funds with around 31.70%, insurance companies - 10.00% and trusts and guarantee funds with 5.00%. The total volume of the issue in circulation reached BGN 185 million after this auction, which increases its liquidity on the secondary market.