The Finance Ministry said today there has been strong demand by institutional investors for the Malta Government Stock Switch Auction announced on 28th November 2011 in connection with the launch of the first market operation under the 3-year MGS Switch Auction Programme.

By the closing date at 2.00 p.m. yesterday, the Treasury received 21 bids totalling €212,980,275 nominal for the new 4.30% MGS 2016 (IV) (the 'destination stock') in exchange of €214,945,000 nominal of the 5.70% MGS 2012 (III) (the 'source stock').

The Treasury is allotting the accepted amounts as shown in the picture above:

The Treasury said it will cancel €159,945,000 (nominal) of 5.70% Malta Government Stock 2012 (III) through the switch auction operation today.

As a result the outstanding nominal balance of the 5.70% MGS 2012 (III) (source stock) has been reduced from €428,885,703 to €268,940,703. The outstanding amount of the newly created stock of 4.30% MGS 2016 (IV) is €158,145,275.

Meanwhile, the Central Bank said yesterday in its money-market report that bids of €21.2 million were placed after the Treasury issued a call for tenders for 28-day bills maturing on December 30, 2011. The Treasury accepted only €1.5 million.

Since €20.25 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €18.75 million, to stand at €306.60 million.

The yield from the 28-day bill auction was 1.204%, i.e. 4.6 basis points lower than that on bills with a similar tenor issued on November 25, 2011, representing a bid price of 99.9064 per 100 nominal. 

The Treasury has invited tenders for 91-day bills and 182-day bills maturing on 9 March, 2012 and June 8, 2012, respectively.