15.05.2017

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 100 million were successfully placed at the auction held on 15 May, with the weighted average yield being 1,78%. The subscribed amount totalled BGN 147.1 million, which corresponds to a bid-to-cover ratio of 1.47. The spread to the ten-year German Bunds in this maturity segment is 139 basis points.

Following this auction, the volume of the 10.5-year GS issue will total BGN 250 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.

Banks acquired the biggest amount of GS at the auction, i.e. 58,13%, followed by pension and guarantee funds with 31,87% and investment intermediaries with 10%.