The State Treasury issues government bonds, as a general rule, in two different ways: new government bonds are issued as syndicated issues, and additional tranches of existing government bonds are issued in auctions. If necessary, the State Treasury can also issue additional tranches of existing government bonds via private placements.
Serial bonds are fixed-rate bullet loans on which the government pays coupon interest once a year. The calculation of interest is based on the actual/actual date basis method. The government bonds are book-entry securities with a settlement date of T+5 for new bonds and T+2 in auctions.
Most of the government bonds are government benchmark bonds in which the primary dealer banks chosen by the government are obliged to maintain active trading on the secondary market in order to safeguard liquidity.
Government bonds are aimed especially at the wholesale market, for example major institutional investors.
Information memoranda of the outstanding serial bonds can be found here.
Other long-term funding
The State Treasury can issue bonds in different currencies under the Euro Medium Term Note (EMTN) programme.
The EMTN programme complements the government’s long-term funding in euro benchmark bonds. Issuance in foreign currencies enables the government to broaden its investor base and reduce borrowing costs. The issues under the EMTN programme are always hedged against foreign currency risk by currency swaps.
Information about issues made under the EMTN programme can be found on Bond and T-bill issues statistics.
Government Treasury bills
The State Treasury acquires short-term funding for the state by issuing Treasury bills. Treasury bills are zero-coupon instruments issued at a discount and with a maturity ranging from one to 364 days. They are book-entry securities, usually issued with a settlement date of T+2.
The State Treasury issues Treasury bills in euros and US dollars through banks included in the Treasury Bill Programme Dealer Group, according to the financing needs of the central government. It is also possible to issue Treasury bills denominated in other foreign currencies. The State Treasury uses FX swaps to exchange the funding from foreign currency Treasury bills into euros.
The State Treasury issues new euro-denominated Treasury bills in auctions, in which the price is determined by the bids submitted by the banks. The State Treasury may also issue Treasury bills on other occasions, depending on demand and the financing needs, in which case the State Treasury defines the reference price for the issue. This issuance method resembles that of European Commercial Paper programmes (ECP).