27.09.2011

A record decrease of the yield on Bulgarian government bonds was registered for a fifth time in a row at the auction for the sale of 5-year EUR-denominated government securities (GS) held yesterday, 26 September. The achieved average weighted annual yield on the approved volume of securities - for EUR 35 million, is 3,90%. This is the lowest yield achieved on this issue since its launching in March 2011 when it reached 4,16 %.

The yield on the total requested securities volume is 4,01%, i.e. lower than the average approved yield of 4,06% on the total nominal value of the issue in circulation. The yield achieved during the auction reaffirms the positive trend of a decreasing yield in the entire debt curve spectrum. The approved yield during the action is below the one on the EUR-denominated Eurobonds with similar residual maturity of Lithuania (4,20%), Turkey (4,80%) and Hungary (6,25%).

Under the conditions of uncertainty on the financial markets in Europe, arising from the crisis on the sovereign debt markets in Euro-area countries, the auction was conducted in an environment of strong interest, the total nominal value of bids reaching approximately EUR 67 million. The registered coverage ratio is 1,91. With the placed nominal value of the issue, amounting to EUR 35 million, its total volume in circulation reached EUR 109 million. The result confirmed the benchmark status of the securities in the medium-term segment of the domestic capital market.

The trend, evident since August this year, of a decreasing yield on the primary market against the background of the high volatility on international markets distinguishes Bulgaria as a sovereign debt issuer and strengthens its status of a low-risk issuer in Central and Eastern Europe. Investors continue to have strong confidence in the policy aimed at attaining low budget deficit and overall fiscal discipline.