Bulgaria placed BGN 200m of 5yr government securities at a record low negative yield

23.02.2021 Source: Ministry of Finance; BNB; FFBH

The Ministry of Finance launched a new issue of 5yr BGN-denominated government securities (GS) maturing on 24 February 2026 with 0.00% annual coupon. BGN 200m of the securities was offered at the auction and total bids amounted to BGN 420.4m which corresponds to a bid-to-cover ratio of 2.1. The Ministry placed BGN 200m at a weighted average yield of negative 0.17% (+45 bps spread to the German Bunds). 63% of the issue was acquired by commercial banks, 24% - by insurance companies, 8% - by pension funds and 5% - by other investors. Recall that the lowest yield ever achieved at a primary auction for a 5yr issue was negative 0.14% in February 2020 while the last auction was in April 2020, when the Ministry of Finance did not approve the subscription.