On June 19, 2013 the Treasury launched first savings bonds intended for individuals
The goal of issuing saving bonds is to provide Latvian residents with additional investment opportunities as well as a possibility to lend to the government and to contribute to economic growth.
First distribution channel is launched via an internet based online portal, which is available 24 hours a day, seven days a week. The internet based online portal is held by the Latvian Central depository (LCD). All individuals having cash account with a Latvian commercial bank and online access to the Internet bank, are eligible for purchase of saving bonds. The records of individual saving bonds holdings are held by the LCD, which provides also settlements for investors and reporting to the Treasury.
The Treasury is currently working to launch two additional distribution channels for savings bonds – network of State JSC “Latvijas Pasts” (Latvian Post) and largest commercial banks of Latvia, acting simultaneously as primary dealers for government debt securities.
The main features of saving bonds are as follows:
- Maturities – 6 months, 12 months, 5 years or 10 years;
- Coupon rates – fixed, set by the Treasury taking into account first of all yields of Latvian Government T-bond and T-Bills as well as other factors;
- The nominal value - 1 EUR;
- Minimum investment - 50 EUR;
- Maximum investment - 100 000 EUR per purchase transaction;
- Secondary market – not existing;
- Early redemption – at any time at face value, interest penalty applies.
Based on experience of other sovereigns, the Treasury estimates that the share of individuals holding Latvian state debt in the form of savings bonds could reach 2% in a mid–term ( 3 to 5 years). Issuance of saving bonds brings diversification of holders of central government debt towards the strengthening of the conservative segment of domestic investors.
Issuance of saving bonds is organized according to the Regulation on Issuing Government Securities.
Link to the internet based online portal for distributing saving bonds (available only in Latvian).