Bulgarian National Bank to Hold Auction for Interest-Bearing Treasury Bonds
On July 22nd, the Bulgarian National Bank will conduct an auction for the sale of interest-bearing treasury bonds with a maturity of three years (1095 days) of an open type with a fixed interest rate from issue No. BG 20 300 24 116 dated April 17, 2024, and due on April 17, 2027, as announced by the central bank. According to the conditions set by the Ministry of Finance, the nominal value of the proposed quantity of bonds amounts to 200,000,000 leva with a 3% annual interest rate.
Primary dealers can participate in the auction with competitive bids, both on their own behalf and on behalf of their clients, as specified by the Bulgarian National Bank.
Participating in Auctions
Primary dealers have the opportunity to participate in auctions by submitting non-competitive bids on behalf of their clients. However, there are certain conditions that must be met in order to do so. These conditions are outlined in the additional terms of the auction.
Primary dealers can also submit competitive bids on their own behalf, but only up to a certain limit. This limit is set at 50% of the total amount of government securities that are available for sale through competitive bids.
This limit ensures that there is a fair and competitive bidding process, while also allowing primary dealers to participate in auctions on behalf of their clients. It is important for primary dealers to adhere to these limits in order to maintain the integrity of the auction process.
Important Notice Regarding Government Bonds Auction
It has been announced that the ratio of Treasury Bills offered through competitive and non-competitive bids is 50 to 50 of the total amount available. Participants in the auction must also take into account the issuance BG 20 300 24 116 dated April 17, 2024. Additionally, the Ministry of Finance reserves the right to reject or approve certain bids, as well as approve quantities different from those initially announced.
We would like to remind everyone that the Ministry of Finance has reopened the issuance of 6-year Treasury Bills. Make sure to stay informed about the latest updates and regulations regarding the auction process.
Successful bond auction held on May 13, 2024
An auction for bonds denominated in Bulgarian lev, with a maturity date of May 15, 2030 and an annual coupon rate of 3.25%, was successfully conducted on May 13, 2024. The issuance amount was increased by 200 million lev in the auction held on July 8, bringing the total nominal value to 600 million lev. The weighted average annual yield at the reopening auction was 3.82%.
The total amount of orders submitted reached 259.4 million lev, resulting in a bid-to-cover ratio of 1.3. This indicates strong demand for the bonds, reflecting investor confidence in the Bulgarian market.
German Federal Bonds Auction Results
German federal bonds were auctioned at a spread of 132 basis points. The auction saw banks acquiring the largest share of the total bids at 79.9%, followed by insurance companies at 10.2%, pension funds at 9.5%, investment intermediaries at 0.3%, and other investors at 0.1%.