18.07.2017

The Ministry of Finance has reopened an issue of 10.5-year BGN-denominated government securities (GS) maturing on 25 July 2027. GS to the amount of BGN 89.5 million were placed at the auction held on 17 July, at a weighted average yield of 1.63 per cent. The subscribed amount totalled BGN 201.8 million, which corresponds to a bid-to-cover ratio of 2.02. The spread to the ten-year German Bunds in this maturity segment is 103 basis points.

Following this auction, the volume of the 10.5-year GS issue will total BGN 339.5 million which is within the limits on GS issuance on the domestic market, as laid down in the 2017 State Budget of the Republic of Bulgaria Law, and conforms to the 2017 issue policy.

The issue is a reference one in 2017 in respect of the harmonised long-term interest rate to evaluate convergence level, which is one of the Maastricht criteria.

Pension and guarantee funds acquired the biggest amount of GS at the auction, i.e. 58,10 %, followed by insurance and life insurance companies with 41,34 % and banks with 0,56 %.