24.04.2012

The Ministry of Finance offered 2-year government securities for sale with great investors' interest. The orders placed at the auction yesterday reached BGN 75 million, which is more than two times the volume of BGN 35 million offered. The coverage ratio of the bonds offered in 2012 in the shortest maturity segment reached 2.15. The corresponding average weighted annual yield was maintained at sustainably low levels, being 2.20% for the total approved amount of BGN 35 million. The financing cost continues being a premium one, which is an indicator of the investors' trust. Just for comparison, the registered average weighted annual yield was 2.36% at the first auction for this issue held on 6 2012.

This auction coincides with serious political and financial fluctuations in Europe. This has led to enhancing the risk expectations on the EU debt market, which results in higher risk premiums required by investors. Despite the short fluctuations on the European market, the outcome of the auction for the sale of 2-year government securities highlight the sustainability and low volatility of the Bulgarian benchmark yield curve.

At the background of these extremely positive results achieved by Bulgaria in the area of government debt management, the European Central Bank published on 13 April 2012 the long-term interest rate data for evaluation of the level of cohesion. According to these data for March 2012, this indicator is 5.07% for Bulgaria. Its value is formed on the basis of the yield of Bulgarian ten-year bonds which drops sharply compared to February and has reached record high levels for four years. The long-term interest rate of Bulgaria is below this indicator for 11 EU member states, with six of them being euro area members. According to this Maastricht convergence criterion Bulgaria moves along with two other EMU members. 

These data are in unison with the Eurostat data published on 23 April 2012 concerning one other Maastricht criterion - the consolidated government debt/GDP ratio. For a second successive year with a ratio of 16.3% as of end-2011 Bulgaria is ahead of all EU members except for Estonia. These data are yet another proof of the Government policy for government debt management with limitations far more rigid than those to euro area members where the debt/GDP ratio is 87.2% at end-2011. The fiscal policy results achieved by the Government place the country in a particularly favourable position by allowing for full integration in the single market and financing at one of the lowest prices for the entire European Community.