The Financial Office of Dimitar Glavchev Takes Out a New Internal Loan
The financial office of Dimitar Glavchev has recently secured a new internal loan amounting to 200 million BGN. This loan was in the form of 3-year government bonds, which are preferred by the current Ministry of Finance along with the 6-year bonds. The results of the auction held on July 22nd show that the achieved weighted average annual yield is 3.64%, which is higher than the result of the last similar auction on June 24th, when it was 3.44%. For comparison, loans with a similar maturity were also taken out in mid-April and at the end of May, when the yield was significantly lower.
Successful Auction for Government Bonds
The recent auction for government bonds in Bulgaria was a success, with a total nominal value of 344.2 million BGN. The participation rate was higher compared to previous auctions, indicating an increased interest in the issuance. The coverage ratio reached 1.72, reflecting the demand for the bonds.
Prior to the current government, internal borrowing through 3-year treasury bonds was minimal. However, with the new financial minister, there has been a significant increase in participation and interest in government bonds auctions. This shows a positive trend in the country’s internal market conditions.
Bulgaria Takes Internal Loan of 1.5 Billion Lev in 2024
On Monday, Bulgaria registered its seventh internal loan of the year, bringing the total borrowed amount to 1.5 billion lev in 2024. The plan is for the government to continue borrowing internally each month until the end of the year, except for December, with a total target of 2.85 billion lev. This high amount of internal borrowing has not been seen since 2022, as last year all new debt was acquired from international markets. It is expected that Bulgaria will once again tap into those markets this year.
Participants are eagerly awaiting the government’s next moves, as the country navigates its financial challenges amid the ongoing economic uncertainties. The decision to rely more on internal borrowing reflects Bulgaria’s commitment to managing its debt responsibly and ensuring the stability of its economy in the long term.
Investors in the Auction of Government Bonds
Banks acquired the highest percentage of DTCs at the auction – 68.8%, followed by insurance companies at 14.8%, pension funds at 13.2%, contractual and guarantee funds at 3.1%, and other investors at 0.1%.