The Catalan Government to issue €2 billion in one and two year retail bonds

The Catalan Government has been issuing retail bonds over the last two years as a regular way of financing its liquidity. All the previous issues have been a success, with high demand. Between April 2nd and April 24th Catalan citizens will be able to buy one year and two year treasury bonds of the Catalan Government’s debt, with an interest rate of 4.5% and 5% respectively.

CNA

March 22, 2012 11:54 PM

Barcelona (ACN).- The Catalan Government will issue on €2 billion of retail bonds on April 2nd. In the last two years, issuing retail bonds has become a Catalan Government’s policy for liquidity purposes, since international markets are short of cash and interests have been considerably high for South European governments. As in previous occasions, there will be one year and two year bonds. This time, the first will be paid at a 4.5% interest rate and the second at 5%. As in other occasions, Catalan citizens will be allowed to buy bonds for a value going from €1,000 euros to €2 million. The participating banks already confirmed are CaixaBank, CatalunyaCaixa, Banc Sabadell. However, the Catalan Finance Ministry expects that 10 other banks will join the process. Citizens will be able to buy retail bonds until April 24th, and they will be allocated following chronological criteria. Therefore, the first citizens asking for them will have the greatest chances to obtain the requested quantity.


The bonds will be paid on May 2nd, the day that last year’s bond issuing expires and the money is given back to private customers. Therefore, citizens who already bought bonds last year can buy them again using the same money, if they wish. In April 2011, the Catalan Government placed €3.244 billion in retail bonds: €960 million in two-year retail bonds and €2.284 billion in one-year bonds, which are those expiring on May 2nd.

The last Catalan Government’s retail bond issue took place in November. Initially €3.7 billion was put on the market, but considering the high demand, the quantity was increased reaching €4 billion. The interest rates paid back in November were 4.75% for one year bonds and 5.25% for two year bonds.