07.02.2012

At the auction held on 6 February 2012, MoF offered for sale a new 2-year bond. Offering this instrument aims to give an investment alternative at the short end of the debt curve. The nominal value of the offered quantity was BGN 20 million.

The presence of Bulgaria in the group of financially stable countries in the region is reflected in the great interest from the participants to more short-term instruments as well. All primary dealers in GS took part in the auction, while, traditionally for bonds of such duration, the own-expense offers prevailed. The auction\'s demand exceeded the supply over four times, with primary dealers placing offers for around BGN 85 million. The-bid-to-cover ratio reached 4.24 and is the highest reached at a GS sale auction since the beginning of 2012 and one of the highest throughout the entire year of 2011.

The weighted average annual yield of the auction is 2.36% for the approved quantity of BGN 20 million and is commensurate to the yield achieved in this maturity segment by issuing leading economies in Europe. The bond yield achieved is below the value of the 2.5-year EUR-denominated GS issued in February 2010, with action yield for this issue varying from 3.43% when placed in March to 2.77 % at its last offering in December 2010.  For comparison, the yield of the one-year discount issues realized in 2010 by MoF in September and December respectively was 2.80% and 2.35%.

The positive trend of lower yield levels monitored in the other benchmark segments shifted to the shorter end of the debt curve as well. This once again shows the attractiveness of sovereign bonds as an option for investment bringing a secure return.