Croatia aims to raise 440 mln euro via maiden retail T-bill issue

"The aim is, along with higher participation of individuals in public debt, to expand the base of investors in public debt and to raise the level of financial literacy and for these reasons, and following an issue of a retail bond at the beginning of the year, we decided to also issue government securities with a maturity of one year," Primorac told a news conference, as seen in a video published on the government's Youtube channel.

The maturity date of the issue is November 21, 2024 and its annual yield is 3.75%.

The ministry could adjust the amount of the allocation for the issue, depending on investor demand, Primorac added.

The subscription for individual investors will be held from November 13 to November 20. The subscription for institutional investors will be held on November 21, when the ministry will also announce the final conditions of the issue. Issue date is November 23. The T-bills with a par value of 1,000 euro each will be listed on the Zagreb Stock Exchange.

In March, the finance ministry set at 3.65% the annual coupon rate on its maiden two-year retail bond issue through which it raised 1.85 bln euro. Following the placement, the ministry announced in summer plans to offer also retail Treasury bills due to difficulties in transmission of key interest rates of the European Central Bank and lower interest rates on deposits on the local market compared to other EU member states, Primorac said. However, market conditions since the issue of the retail bond have changed and the interest rates generally have increased, he added.

"For sure, we can say it is a good offer compared to the yields that individuals could achieve on alternative investments like deposit accounts," Primorac said.

A domestic government bond of 1.5 billion euro matures at the end of November and, depending on the outcome of the issuance of T-bills for retail investors, the finance ministry will decide how to refinance the maturing bond, he added.

Primorac said it these are not the last issues of T-bills and bonds available for retail investors because the government plans to develop and launch next year a platform to offer government securities with any kind of maturity in a move to influence interest rates using the instruments of the fiscal policy since the monetary policy is defined on the level of the euro system.

($ = 0.936 euro)