The Ministry of Finance issued two-year government bonds worth 229 million KGS at an annual interest rate of 13.5%

The Ministry of Finance of Kyrgyzstan raised 228.9 million KGS through the issuance of two-year government treasury bonds on the Kyrgyz Stock Exchange. The weighted average yield on the securities following the October 23 auction was 13.5% per annum, up 0.5 percentage points from the previous auction.

Initially, the Ministry of Finance offered investors bonds worth 500 million KGS. However, demand totaled 276 million KGS, and successful bids amounted to 228.9 million KGS. Thus, the government managed to place only 45.8% of the offered volume.

The yield on the accepted bids ranged from 13% to 13.5% per annum. The bonds’ coupon rate is 5%. The difference between the coupon rate and the actual yield is due to the terms of the offering, including the purchase price.

Compared to the previous auction, investor interest in two-year bonds has grown significantly. For example, on October 16, with an offering of 700 million KGS, demand totaled only 19.7 million KGS. The entire amount was placed at a weighted average yield of 13% per annum.

Consequently, the volume of accepted bids increased more than 11-fold over the week; however, the yield that the government must provide to investors also rose.