Low interest on long-term bonds/ Yield rises to 6.22% for 15-year bonds. Demand did not fully cover the announced amount
Investor interest in 15-year bonds was more moderate in the June 3 auction, where demand failed to fully cover the amount announced by the Ministry of Finance. According to data from the Ministry of Finance, in the June 3 auction for 15-year bonds, the accepted uniform yield and coupon were set at 6.22%.
However, compared to past auctions, the yield is higher. The Ministry of Finance had auctioned 2 billion lek, while the total requests amounted to about 1.41 billion lek. As a result, bids worth about 1.41 billion lek were accepted, not reaching the initial financing target.
The bid-cover ratio of the auction was 0.71, indicating that the demand was lower than the announced offer. The minimum yield required by investors was 5.50%, while the maximum yield required reached 6.70%, reflecting different market expectations for the required return at this long-term maturity.
However, government bonds continue to be attractive instruments for investors seeking long-term security and predictable income. They offer capital protection and portfolio diversification opportunities, especially for institutional investors and individuals with long-term investment horizons.
For this year, the Ministry of Finance has planned regular auctions of government securities to ensure the necessary financing of the budget and to support the development of the domestic debt market. The progress of the auctions will depend on market liquidity conditions, interest rate expectations and investor demand.
Thus, the most recent auction for 15-year bonds showed more moderate investor interest compared to some previous auctions, as demand failed to cover the announced amount. However, the yield level of 6.22% continues to make this instrument an attractive alternative for investors aiming to secure stable income over a 15-year horizon.
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