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The Ministry of Finance has reopened a 10.5-year GS issue at a record low yield

25.02.2020

On 24 February 2020, the Ministry of Finance reopened the issue of 10.5-year BGN-denominated Government Securities (GS) maturing on 21.12.2029, which was placed on 21.06.2019.

The auction resulted in successful placement of Government Securities with an aggregate nominal value of BGN 200 million, at a weighted average yield of 0.12 % which is record low for this maturity segment.

The issue is a reference one in respect of the harmonised long-term interest rate to evaluate the nominal convergence level, which the ECB monitors as one of the Maastricht criteria. The yield achieved at the auction is lower than the value of this indicator for January 2020 (0.15 %).

The subscribed amount totalled BGN 265.8 million, which corresponds to a bid-to-cover ratio of 1.33. The recorded spread to the analogous German Bunds is 60 basis points. The banks acquired the largest quantity of GS at the auction – 92.85 %, followed by pension funds – 4.65 %, and other investors – 2.50 %.

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