The National Bank of the Kyrgyz Republic was unable to attract buyers for the Ministry of Finance’s five-year bonds

At the auctions on 21 August, the government offered investors five-year and ten-year bonds totalling 2 billion KGS. As a result, it managed to raise only 660 million KGS — a third of the planned amount. The placement of the five-year bonds did not take place at all.

Bids totalling just 50 million KGS were received for the five-year government treasury bonds with a face value of 1 billion KGS. Thus, demand covered only 5 per cent of the supply.

These bonds could not be sold. The National Bank declared the auction a failure due to an insufficient number of participants. The regulator did not specify exactly how many investors had submitted bids.

The five-year bonds had a coupon rate of 6 per cent per annum. Their issue date is 24 August 2026, with maturity in 2031.

The ten-year bonds attracted greater interest, though here too demand fell short of supply. With a stated volume of 1 billion KGS, investors submitted bids totalling 660 million KGS. All bids were accepted, and the issue’s yield stood at 16 per cent per annum. The coupon rate on these bonds has been set at 8 per cent.

The coupon rate and the yield are different indicators. The coupon determines the regular payments to the bondholder, whilst the total yield depends, amongst other things, on the price at which the bond was purchased at auction.

In total, investors submitted bids for 710 million KGS out of an offer of 2 billion KGS. This represents 35.5 per cent of the announced volume. In fact, the government placed securities worth only 660 million KGS, or just 33 per cent of the target. Bonds worth 1 billion 340 million KGS remained unsold.