Bulgaria placed BGN 150m of 5.5-year government bond issue at 4.13% yield; Another auction for BGN 200m of government securities set on 3 October

28.09.2022 Source: Ministry of finance; FFBH

Bulgaria approved bids for BGN 149 950 000 of 5.5-year BGN-denominated government bonds maturing on 28 March 2028 with 3.20% semi-annual coupon. Note that this is below the maximum amount of BGN 200m, which was offered. The total bids amounted to BGN 203.9m which corresponds to a bid-to-cover ratio of 1.02. The approved portion of the issue was placed at a weighted average yield of 4.13% (+223 bps spread to the German Bunds). 81.3% of the issue was acquired by commercial banks, 9.3% - by pension funds, 6.7% - by insurance companies, 2% - by investment and guarantee funds and 0.7% - by investment intermediaries. In a separate note, the Ministry of Finance has announced an auction for BGN 200m of 10.5-year government securities (GS) on 03 October. The bonds have 2.25% annual coupon, paid semi-annually and mature on 27 July 2026. Given the tenor of less than 4 years, it could be expected that the bond would act as 3.5-year. Recall that the previous auction for government securities of the same duration was on 19 September, when the Ministry of Finance placed BGN 200m at a positive weighted average yield of 3.01% (+147 bps spread to the German Bunds) and the bid-to-cover ratio reached 1.51.