Bulgaria's sells 10.5-year T-bonds at new record low yield.

By bne IntelliNews February 6, 2013
On February 4, Bulgaria raised BGN 50mn (EUR 25.5mn) in an auction for 10.5-year Treasury bonds with an annual coupon rate of 4%. The yield dropped to an average of 3.26%, which is a new record low level. The yields at the previous such auctions were 3.43% in January and 5.35% in January 2011. The stable downward trend indicates falling perceived risk and together with the very high interest in the issue shows that investors trust government's finances and ability to repay debt. The coverage ratio, although still high, shrank to 2.11 from 3.54 at the previous auction which may be a sign that the 10.5-year bonds of the government are close to their bottom price. On Feb 11, the finance ministry will reopen a 7-year T-bonds issue, denominated in euro and maturing on January 16, 2020. It will seek to raise EUR 20mn. At the previous auction for 7-year T-bonds that was held on January 14, the yield inched up to an average of 2.54% from 2.53% at the auction held in November 2012.

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