28.01.2013

After the extremely successful auction for the sale of 5-year bonds on 21.01.2013, today the Ministry of Finance launched a new issue of 3-year BGN denominated GS with maturity in 2016. At the first for the issue auction held on 28 January 2013 the yield achieved was 1.13%, being the lowest one in that maturity segment. The original maturity of the issue is 3 years and it is BGN denominated.

The total volume of the orders reached BGN 149 million while the amount offered and approved was BGN 40 million, or coverage coefficient of 3.73. The distribution by investor type is as follows: banks - 48.9%, management companies and contractual funds - 15.1%, pension funds - 4.2% and other institutional investors.

A bond of such characteristics has been launched for the first time since 2007. The yield on the bond with the same parameters in 2007 was 4.14%. The yield approved at the auction is lower than the one on bonds of similar characteristics of a number of states - Slovenia (4.27%), Hungary (4.25%), Romania (3.11%), Spain (2.80%), Ireland (2.23%), Turkey (2.16%) and Lithuania (1.65%). The spread to the German Bunds reached a record low level for this maturity segment - 78 p.p. These values are lower than the current value of the CDS indicator, measuring the insurance premium against issuer\'s default, which shows that the yield does not incorporate any currency risk premium.

The launching of the new benchmark GS issues at the beginning of the year has confirmed the positive downward trend from the second half of 2012 for reducing yield in all segments of the benchmark debt curve.