Ministry of Finance Reopens 10.5-Year Issue of GS at Record Low Yield
On 27 January 2020 the Ministry of Finance reopened an issue of 10.5-year BGN-denominated government securities (GS) placed on 21.06.2019 and maturing on 21.12.2029.
GS of an aggregate nominal value of BGN 200 million were offered successfully at the auction at a weighted average yield of 0.13% 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 is reported by the ECB as one of the Maastricht criteria. The yield achieved at the auction is lower than the one in December (0.18%).
The total subscribed amount reached BGN 463.15 million, which corresponds to a bid-to-cover ratio of 2.32. The spread reported to the analogous German Bunds is 48 basis points. The participants were highly interested, with the biggest amount of GS acquired by banks – 47.0%, followed by insurance companies with 36.8%, pension and guarantee funds with 9.6%, mutual funds with 1.1%, and other investors with 5.5%.