14.02.2012

On 13 February 2012 the Ministry of Finance reopened successfully the 5-year issue of GS from 2011. Primary dealers' orders reached EUR 116 million with EUR 35 million offered for sale, which is indicative of the great demand of market participants for sovereign bonds offered at the domestic market.

The weighted average annual yield of the volume of GS offered and approved at this auction was 3.47%. This is the lowest yield realized under this issue since its initial issuance on 30 March 2011, with the weighted average yield since reopening the issue throughout 2011 being 4.03%. The yield registered at the auction is significantly below the current one of the Euro bonds of similar residual maturity of states with solid public finances such as Lithuania (4.26) and Slovenia (4.14%) and is far below the level of an emerging and rapidly developing economy such as Turkey (4.65%). In an environment of growing insecurity of European debt markets, the yield of Bulgarian sovereign bonds continues to lessen.

The bid-to cover ratio reached 3.33, which is its highest level for this issue since May 2011. There was also great demand for the volume of GS offered for participation of competitive bids, as well as for non-competitive ones. The investor base analysis shows that banks are in the lead by acquiring 51% of the approved amount, followed by pension funds - 37%, and insurance companies - 7%.

The Ministry of Finance has taken account of the interest of market participants to the EUR-denominated issue No BG 20 300 11 113 and has decided to hold an auction for the same issue on 27 February 2012. This decision is in unison with the issuer's intention for a flexible approach to conducting the issuing policy.