15.05.2012

The demand for 5-year Bulgarian government securities exceeded by two times the quantity offered for sale by MoF at the auction held today. Participants placed offers amounting to BGN 110.05 million, with BGN 50 million offered by the issuer. The coverage ratio of the issue is 2.20, and this has been the highest value of the three auctions held for this issue since the beginning of 2012. The average annual weighted yield for the approved BGN 50 million is 3.83% and illustrates the lasting stability in the medium-term part of the debt curve of Bulgarian sovereign debt.

The supply of bonds in this maturity segment meets the expectations of government debt market participants to the utmost degree. Investor base analysis shows the banks\' leading position, which acquire 35% of the apprroved face value, followed by pension funds (32%) and insurance companies (10%).

The clear trend of great interest at low central government cost of financing corresponds to the conclusions made in the European Commission\'s Economic Outlook (1/2012). Following these conclusions, Bulgaria\'a rigid discipline has successfully contributed to improving the country\'s fiscal position owing to the timely measures aimed at structural deficit consolidation and implemented by the Government at the end of 2010 and throughout the previous year.

Against the background of the on-going instability in the euro area owing to the political situation in several Member States and the deepening downward trend in some of the biggest debt markets in Europe, Bulgaria has strengthened its position of a key stability factor in the region. This position has been reflected in the independent evaluation of the participants in the auction held for the sale of medium-term government securities. Despite the concerns for any possible negative scenarios for the future of the single currency, the cost of Bulgarian government securities has remained a premium one, and extremely great interest has been registered.