02.09.2013

The Ministry of Finance successfully sold one-year government securities (GS) to the amount of BGN 300 million. At the auction held on 2 September 2013 the coverage coefficient achieved was 3.53, the subscription reaching BGN 1.059 billion. The annual yield on the quantity approved is 0.60%, while the yield on all competitive bids received - 0.71%. Despite the longer maturity of the issue the indicator is lower compared to the last auction for short term GS held on 20 February 2013 when the annual yield on the approved 6-month GS amounting to BGN 800 million was 1%. The one-year issue of GS with maturity 4 September 2014 is the first one since December 2010 with such maturity. At the auction held on 6 December 2010 the yield achieved was 2.35%.

The great interest in the auction is determined by both investors\' demand for short term GS and by the high liquidity in the financial system additionally supported by the payment in August 2013 of the 6-month GS amounting to BGN 800 million. Banks acquired the largest quantity of GS - 70%, followed by pension funds - 15.80% and guarantee funds - 14.20%.

The yield achieved at the auction is below that of sovereign bonds with similar maturity of a number of EU Member States and countries from the region - Turkey (9.70%), Romania (4.28%), Hungary (4.10%), Slovenia (2.83%), Portugal (1.76), Spain (1.28%), Italy (1.17%) and is comparable with that of Lithuania.