This year EUR 2.2 billion was borrowed in the domestic market auctions
The results of this year's auctions and trends were discussed on Thursday at the annual meeting of the experts from the Ministry of Finance and representatives of the Lithuanian GS auctions, Nasdaq stock exchange and depository, and representatives of the Bank of Lithuania.
This year, 49 auctions were held, during which EUR 2.2 billion was borrowed in the domestic market. The most popular were the issues of Government Securities (GS) with short residual maturity (of up to 4 years), the issues amounted to just over EUR 1 billion.
“The purpose of government securities auctions is to ensure a stable supply of securities to investors. We are pleased with both the decreasing profitability and the increased demand observed this year, which has returned to pre-pandemic levels,” says Rasa Kavolytė, Director of the State Treasury Department.
In recent years, the Government, implementing its borrowing strategy, has been distributing GS for EUR 1.7-2.6 billion on an annual basis in domestic market auctions. Every year, an effort is made to offer investors 3, 5, 7 and 10 year or similar residual maturity GS. This year, the demand for GS was more than 3 times higher than the borrowing requirement, and the weighted average yield on borrowing decreased to 3.29% (in 2023, it was 3.91%).
Eurobond issues issued in foreign markets continued to be tapped in the 2024 auctions. Slightly more than EUR 1.5 billion was borrowed through the distribution of GS issues registered with the Central Securities Depository of Lithuania (33 auctions), and almost EUR 700 million was borrowed through tapping the Eurobond issues (16 auctions).
In addition to auctions, Government Savings Notes (GSN) were also distributed on the domestic market. Following the resumption of GSN distribution by the Ministry of Finance last year, Lithuanian residents purchased GSN for EUR 65.1 million in nine issues this year. Since October, defence bonds have been distributed as targeted GSN to finance defence needs. Following the launch of the distribution of defence bonds this year, buyers purchased these bonds for a total amount of EUR 11.3 million through two issues. The third issue of defence bonds is currently being distributed. Everyone can contribute to strengthening the country’s security by purchasing defence bonds, whether they are individuals, businesses or other organisations, at Swedbank and SEB internet bank, as well as at SEB bank branches.
Additional information:
- GS is the main instrument of state borrowing. GS auctions are planned and the characteristics of issued GS are determined by the Ministry of Finance, in the domestic market it is organized by AB Nasdaq Vilnius.
- Only those banks and financial brokerage companies can participate in GS auctions that meet the requirements set by the Ministry of Finance for GS auction participants and have signed the GS auction participant agreement with the Ministry of Finance. Currently, AS Citadele banka (Latvian commercial bank), AS Luminor Bank, AB SEB bankas, AB Swedbank, AS Swedbank (Latvian commercial bank), AB Šiaulių bankas and Erste Group Bank AG (Austrian commercial bank) participate in the Lithuanian GS auctions.
- More information about GS auctions is available here.
Last updated: 20-12-2024
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