site.bta Finance Ministry Sells Lv 50 Mln in New Issue 10.5-Year Government Securities

Finance Ministry Sells Lv 50 Mln in New Issue 10.5-Year Government Securities

Sofia, January 24 (BTA) - Bulgaria's Ministry of Finance said in a press release on Tuesday that it had launched a new issue of 10.5-year lev-denominated government securities maturing on July 25, 2027. Government securities to the amount of 50 million leva were successfully placed at the auction held on January 23 at a weighted average yield of 1.76 per cent. The subscribed amount totalled 211 million leva, which corresponds to a bid-to-cover ratio of 4.22. The spread to the ten-year German Bunds in this maturity segment is 134 basis points. The achieved yield and spread are record low for securities in this maturity segment.

The new issue will be a reference one in 2017 in respect of the harmonized long-term interest rate to evaluate convergence level, which is one of the Maastricht criteria.

The participants showed strong interest both in the amount offered for competition orders sale and in the portion of non-competition orders sale determined for allocation among investors. Pension and guarantee funds, which traditionally show strong interest in long-term government securities, acquired the biggest amount of government securities at the auction, i.e. 45.03 per cent, followed by banks with 41.60 per cent and general insurance and life insurance companies with 13.37 per cent.