13.01.2014

The Ministry of Finance has launched a new issue of 10.5-year BGN-denominated government securities (GS) maturing on 15 July2024. GS of BGN 50 million were offered at the auction held on 13 January at a weighted average yield of 3.74 per cent. The offers placed total BGN 94.72 million, the coverage coefficient being 1.89. The spread to the German Bunds in this maturity segment is 190 basis points. The issue is a reference one in respect of the harmonised long-term interest rate to evaluate convergence level, which is one of the Maastricht criteria.

The bidders showed great interest in both the quantity offered for competitive sale and in the non-competition part allocated among the investors. The biggest amount of GS was acquired by banks - 36.68%, followed by pension funds - 36.08%, insurance companies - 25.24% and guarantee funds - 2.00%.

The yield achieved at the auction held on 13 January 2014 is lower than that of the bonds in the same maturity segment of a number of EU states: Spain (3.813%), Italy (3.901%), Poland (4.351%), Slovenia (4.593%), Romania (5.114%), Portugal (5.290%), Hungary (5.377%), Greece (7.585%).