The average yield to maturity for the issued six-month and twelve-month bonds was 3.853 percent and 3.601 percent, respectively, the Ministry of Finance said in a statement.

Short-term bonds were last issued in September, the average six-month bond yield was 4.088 percent and it was 4.111 percent for 12-month bonds.

Bond issues take place to cover the state's expenses and short-term bonds are aimed at professional investors only.

SEB: Estonian state received a loan at the Euribor level

SEB capital markets broker Erik Laur noted that when the state issued short-term bonds last autumn, the six-month and twelve-month Euribor rates were 4.125 percent and 4.228 percent, respectively, slightly higher than the expected yield of the bonds.

"While the six-month euro interest rate has fallen by just under 30 basis points from its level six months ago, the 12-month rate has fallen by almost 50 points. As a result, the Estonian government borrowed at much lower levels this time, with the weighted average yield on six-month paper at 3.853 percent and the 12-month bond coming to maturity at an average yield of 3.601 percent," he said.

Laur added that longer-duration Estonian government bonds trade at significantly lower levels. The yields of six, eight, and 10-year papers listed on international markets are at 3.05 percent, 3.2 percent, and 3.4 percent, respectively.

"There was also an auction of Lithuanian 2.5-year bonds today, which closed at 3.35 percent," he said.

--

Follow ERR News on Facebook and Twitter and never miss an update!