Bulgaria sold BGN 50mn (EUR 25.5mn) worth of five-year T-bonds with an annual coupon of 3% at an auction held on Monday, August 12, the central bank said. The bonds' average yield rose to 2.38% from 1.90% in the previous such auction held on April 22. Demand at the August 12 auction amounted to BGN 84.1mn, resulting in a coverage ratio of 1.68 - down from 3.24 in the previous auction.
The increase of the yield is likely linked to the political instability in the country and the uncertainty around the budget revision bill that proposes raising this year's budget deficit to 2% of GDP and sets the new debt ceiling for 2013 at BGN 3bn. The bill passed second reading in parliament in early August but was after that vetoed by president Rossen Plevneliev. Assembly speaker Mihail Mikov said that the legislators will vote once again on the vetoed bill by the end of this week.
Bulgaria has accumulated BGN 1.54bn in new debt so far this year.
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