14.12.2010

On 13 December the Ministry of Finance reopened the Government Securities (GS) issue with original maturity 2 years and 6 months, denominated in Euro. An average weighted annual yield of 2.77% for the approved SG amount of EUR 15 million was registered. This has been the lowest yield for the issue registered on all auctions thereon since the beginning of the year.

The investor interest in the auction was very high - the nominal subscription was EUR 58.9 million - demand being almost four times higher than the amount offered. The spread against the yield of German Bunds, considered by investors as risk-free, is also the lowest for the year in all maturity segments.

The results of the last auction correspond to the downward yield trend in all segments of the sovereign debt curve and are indicative of the investors' positive opinion about the economic policy implemented by the Government.

The average yields of government securities auctions conducted by the Ministry of Finance in November and December have decreased. In the last two months of the fiscal year the results on the GS primary market reveal the lowest levels of yields for the issues that were offered.

Not only did the banks primary dealers participate actively on the auctions but also banks non-primary dealers and institutional investors: i.e. pension funds, insurance companies, UCITs, who participated with competitive and not competitive bids. Demand for government securities exceeded the offered quantity as the issues were from 4 to 6 times oversubscribed, which is a sign for the high investors' demand.

The recorded lowest average yields on the auctions in all of the offered maturity segments led to a reduction in the risk premium. During the past two month period spreads to German Bunds, securities considered by investors as risk-free, have recorded their lowest values throughout the year.

The results on the auctions for government securities in November and December, alongside with the tendency for reduction of the yields in all segments of the sovereign curve indicate the positive investors' evaluation of the government-led economic policy.