Citizens can invest in government treasury bills starting today and for the next week, and for each treasury bill held until maturity, i.e., until November 21 of next year, they can earn 36.05 euros.
The first round of subscriptions begins today and lasts until November 20 at 11 a.m. The targeted nominal amount of the issuance of “people’s” treasury bills is 440 million euros, and the right to purchase in the first round is exclusively for individuals, adult Croatian citizens in Croatia and abroad, as well as foreign citizens residing in Croatia. The second round of subscriptions, intended for institutional investors, will open on November 21, from 9 to 11 a.m.
The issuance date of the treasury bills is November 23 of this year, the maturity date is November 21, 2024, which is 364 days from issuance, and the annual yield rate is 3.75 percent.
One treasury bill at a price of 963.95 euros
A minimum of one thousand euros in treasury bills can be subscribed per investor. This will be the nominal value of one treasury bill that citizens will receive at maturity.
However, unlike “people’s” bonds, where the nominal amount was subscribed and a coupon interest rate was received, treasury bills will be purchased at a discount, at a price of 963.95 euros for one bill, and at maturity, citizens will receive 1,000 euros for one bill.
At the same time, one investor can submit only one offer for the subscription of treasury bills, but there is no limit on the number of treasury bills they can subscribe to.
Subscription of treasury bills at Fina, and payment possible through a commercial bank
Interested investors will be able to subscribe to treasury bills in the first round through the network of branches of the Financial Agency (Fina), which has 170 locations across Croatia.
Citizens must bring a valid ID card or passport with them, and one of the details they must have “on hand” is the account number in a commercial bank.
Treasury bills are subscribed by filling out, signing, and accepting a confirmation at Fina, and upon signing, citizens will be immediately informed about how to make a valid payment for the subscribed treasury bills.
The deadline for payment of funds in the first round is November 20, by which the payment must be executed and recorded.
Citizens will not pay a fee for payment transactions for treasury bills worth up to 10 thousand euros at Fina’s counter, but they will for amounts above that, in accordance with the agency’s conditions. If they wish to make the payment at a bank counter or via internet banking, the conditions depend on the individual bank.
Fina also noted that when making a cash payment of 30 thousand euros or more, as part of the standard implementation of measures to prevent money laundering and financing of terrorism, the investor must provide proof of the source of the funds.
Recommendation for citizens who can hold treasury bills until maturity
Finance Minister Marko Primorac last week listed the reasons for issuing these treasury bills at a press conference in Banski dvori, after the state issued “people’s” bonds for the first time earlier this year.
He emphasized the lagging deposit interest rates in banks compared to other EU member states, and mentioned goals such as increasing citizen participation in public debt, expanding the investor base in it, and raising the level of financial literacy.
Like the ‘people’s’ bonds, treasury bills will be listed on the Zagreb Stock Exchange, and this time the minister also recommended that citizens who will not have to sell them, but can hold them until maturity, invest in government securities.
– In that case, they are absolutely sure that they will achieve the expected yield at maturity (…) Trading is possible, but in that case, we do not guarantee – said Primorac, noting that according to legal changes that will take effect on January 1 of next year, investments in treasury bills will not be taxed as income.
He also stated that the Ministry of Finance has the option to accept a higher or lower offer than the planned 440 million euros, so if demand is higher, it is ready to increase the nominal allocation amount.
However, if the issuer, i.e., the Ministry of Finance, determines the nominal issuance amount in the first round to be below the total collected interest, the treasury bills will be allocated to investors proportionally to the number of bills subscribed, while any excess paid funds will be returned within five working days after the offer period ends, to the account specified in the confirmation, as explained in the public call for the subscription of treasury bills.
