11.02.2013

The Ministry of Finance reopened for a second time for the 2013 issue year the 7-year euro denominated bond. At the auction held on 11 February the lowest yield ever was registered in that maturity segment - 2.42%. This is by 12 b.p. lower than the yield registered at the launching of the bond on 14 January this year, the yield then being 2.54%. The spread to the perceived by investors as non-risk German Bunds shrank to 143 b.p. The interest in the auction was strong and demand exceeded almost three times the offered amount, the coverage coefficient being 2.9.

The yield registered at the auction is below the current one on the 7-year sovereign bonds of a number of EU Member States and countries from the region - Hungary (4.88%), Slovenia (4.87%), Croatia (4.65%), Spain (4.44%), Italy (3.84), Ireland (3.60%) and Turkey (3.33%). The distribution by type of investor is as follows: banks - 67%, pension funds - 13%, contractual funds - 10% and others - 10%.

The downward yield trend for Bulgarian sovereign bonds is accompanied by lower value of the risk assessment of the state. In the period January 2012 - January 2013 the quote of the 5-year CDS, the risk premium against default of the country, drop from 400 b.p. to 100 b.p., which places Bulgaria in the same group with the Central European and Baltic states and brings it closer to the risk assessment of a leading economy such as France.