21.02.2012

At the auction held on 20 February the Ministry of Finance has achieved a record breaking low yield in the five-year maturity segment in BGN since 2005. The weighted average of the annual yield of the auction is 3.71%. The offered for sale issue has an original maturity of 10 years, issued in 2007, and is with an approximate residual maturity of 5 years as of the date of the auction. The bond has been reopened for the first time since 2007 and after this auction it totals BGN 300 million. By reopening this issue the MoF is providing an opportunity for investment in an instrument denominated in national currency and positioned in the medium term segment of the debt curve. The nominal value of the offered for sale and respectively approved amount was BGN 50 million.

By comparison, the weighted average of the annual yield of the held in January 2012 auction for the sale of GS denominated in BGN and maturity 2017 was 3.96%. The record breaking low yield again confirmed the Bulgarian GS as the most attractive and secure investment instrument in an environment of continuing uncertainty resulting from the Euro area debt crisis. The yield of the auction is below that of the Euro Bonds with similar residual maturity of countries with sustainable public finances such as Slovakia (3.78%) and Slovenia (4.65%), considerably below the level of a rapidly growing economy such as Turkey (4.83%) and close to the yield of the Polish Euro Bonds (3.57%).

Demand doubled the amount offered for sale. A wide range of investors participated in the auction - banks bought 44% and pension funds - 33% of the amount offered for sale.

In an exceptionally risky economic and financial international environment Bulgaria continues to maintain one of the lowest debt/GDP ratios, while at the same time controlling its budget deficit level. The good performance at the GS auctions objectively contributes to raising the international prestige of the country, which on its part contributes ever more to developing an effective investor base with strong interest in the Bulgarian GS market.