MORE THAN 360 FOREIGN INVESTORS BUY INTO THE LATEST ROUND OF BULGARIAN BONDS

Bulgaria sold €950 mln in government debt to more than 360 foreign investors, with orders totaling in excess of €6 bn, according to data of the Ministry of Finance. The yield on the 5-year paper is 4.436%. The bond issue is priced at 99.182% of the face value, with a coupon at 4.25% a year.

The final allocations by regions were as follows: 25% for the UK, Germany 17%, Austria 13%, Asia 9%, US offshore 9%, Switzerland 7%, France 5%, Italy 5%, others 10%. By investor type, the bond composition consisted of: fund managers - 43%, banks -19%, insurance and pension funds - 14%, hedge funds - 12%, central banks - 6%, others - 6%. No bids from Bulgarian investors were accepted. The date of issuance was July 2, 2012, with a maturity date – July 9, 2017.

"The strong investor response and robust participation in this transaction reflect Bulgaria's obvious creditworthiness, as evidenced by its solid macroeconomic indicators, and remarkable progress achieved in terms of fiscal consolidation and financial stability. This bond issue marks an impressive return for Bulgaria to the international capital markets after a decade of absence", said the Ministry of Finance in an official statement.

Successful debt issues are traditionally accompanied by a fall in yields (which automatically means a price increase) immediately after the auction. This sets the stage for further bond emissions at more favourable conditions. In this particular case, investors demanded a return of 4.15-4.20% in order to buy government debt, while the offered rate was 4%. Investor interest in the paper at a yield of 4.15-4.20% came even before the end of the transaction, noted Investor.bg.