Issuance Conditions of 88th Issue of Treasury Bonds - T-Bond 0.85 %, 18 - CZ0001004246

Dept 20 - Debt and Financial Assets Management Department
Dept 20 - Debt and Financial Assets Management Department

Published

  • State Debt
  • T-Bonds

Official information
of the Ministry of Finance
dated 6 March 2014
defining issuance terms of
“Government Bond of the Czech Republic, 2014–2018, 0.85 %“

The Ministry of Finance (hereinafter referred to as “the Ministry”) issues book-entered government bonds within the scope defined by special law and determines their issuance terms in accordance with s. 26 of the Bonds Act, Act No. 190/2004 Coll. as amended (hereinafter referred to as “the Bonds Act”). These issuance terms set out the rights and obligations of the issuer and bondholders, as well as the information about the bond issue and the elements of the Government Bond of Czech Republic, 2014–2018, 0.85 % (hereinafter “the bond“ or “the bonds“:

  1. Basic description of the bonds:
    Issuer: Czech Republic – the Ministry of Finance
    Name: Czech Republic Government Bond, 2014–2018, 0.85 %
    Short name: ČR, 0.85 %, 18
    Serial number of issue: 88.
    Face value: CZK 10 000
    Form of bond: book-entered security on bearer
    Category of bond: government bond
    Currency in which the bonds are denominated: Czech koruna (CZK)
    Beginning of the subscription period: 12 March 2014
    Termination of the subscription period: 15 February 2018
    Issue date: 17 March 2014
    Maturity date: 17 March 2018
    Yield of bond: defined by fixed interest rate of 0.85 % p. a.
    Taxation of yields: according to the laws of Czech Republic
    ISIN: CZ0001004246
    Separated principal – ISIN CZ0000702964
    Coupon No. 1 – ISIN: CZ0000702972
    Coupon No. 2 – ISIN: CZ0000702980
    Coupon No. 3 – ISIN: CZ0000702998
    Coupon No. 4 – ISIN: CZ0000703004
  2. The bonds are issued based on special laws in accordance with s. 25 (2) of the Bonds Act.
  3. The bonds are book-entered securities. They are registered in the central record of book-entered securities maintained by the Central Depository of Securities (Centrální depozitář cenných papírů, a.s., having its registered office at Rybná 14, 110 05 Prague 1, Czech Republic, entered in the Commercial Register maintained by the Municipal Court in Prague, Section B, Insert 4308, ID No. 25081489, hereinafter „Central Depository“) and persons authorized to maintain follow-up records in accordance with s. 92 (2) of the Capital Market Act, Act No. 256/2004 Coll. as amended.
  4. The bonds may be acquired by legal or natural persons having their seat or residence in the territory of Czech Republic as well as abroad (hereinafter referred to as the “Investor” or "Investors").
  5. Right to payment of the yield of bond has the person who is entitled to exercise the rights related to the bond on 15 February starting as of 2015. In the leap years the right to payment of the yield of bond has the person who is entitled to exercise the rights related to the bond on 16 February. The right to payment of the yield of bond from the issue date (inclusive of this date) to 17 March 2015 (exclusive of this date) has the person who is entitled to exercise the rights related to the bond on 15 February 2015. Transferability of the bonds after 15 February 2018 is excluded.
  6. The yield of bond is defined by fixed interest rate of 0.85 % p.a. The yield of bond is paid once a year, always on 17 March starting as of 2015. If the payment date falls on a date which is not a working day, the payment will be made on the next working day without the entitlement to the proceeds for the deferred payment.
  7. Yield period is 12 months, from 17 March of the respective year (inclusive of this date) to 17 March of the following year (exclusive of this date). First yield period for the payment of yield begins on 17 March 2014 (inclusive of this date) and ends on 17 March 2015 (exclusive of this date). The calculation of yield and accrued yield of bond is carried out on the basis actual number of calendar days in the year and actual days in a respective yield period (standard ACT/ACT ICMA). Accrued yield of the bond is included in the bond price from the issue date, i.e from the beginning of the respective yield period to the date of the calculation of accrued yield.
  8. The issue of bonds will be issued within the subscription period gradually (in tranches).
  9. The issue rate of respective tranche of bond is determined by the price achieved in the auction.
  10. The bonds will be offered for subscription in the Czech Republic. The bonds will be offered for sale via the Czech National Bank pursuant to s. 26 (4) of the Bonds Act. Primary sale of bonds, method and place of bond subscription, method and time of delivery to individual subscribers and the manner and place of payment of the issue rate of the subscribed bonds is governed by the Rules for the Primary Sale of Government Securities organized by the Czech National Bank published on the website of the Czech National Bank and the Ministry. Primary sale of bonds is carried out in via auctions. The auction place is Czech National Bank. Only the person specified by the Issuer or the Issuer may participate in the auction (hereinafter referred to as the “primary dealer” or “primary dealers”). Other investors may participate in the auction indirectly through primary dealers or Issuer. The Issuer is authorized to book securities on the issue date firstly on its asset account in accordance with s. 15 (4) of the Bonds Act, and to acquire bonds before the maturity date, including buy-backs of bonds at any time and any price, and under other conditions defined by the Ministry. The bonds acquired by the Issuer before the maturity date, including bonds bought back by the Issuer, do not expire. It is at the Issuer´s discretion to keep the bonds on its account, sell them or decide otherwise.
  11. Primary sale of the first tranche will be carried out by the method of American auction organized on 12 March 2014 by the Czech National Bank. The issuance and primary sale of further tranches will be decided by the Issuer, as well as the date of respective tranches. The announcement of the bond auction is published on the website of the Ministry well in advance.
  12. The estimated total nominal value of the issue of bonds is CZK 50 000 000 000 (in words: fifty billion Czech koruna. In accordance with § 7 of the Bonds Act, the Bonds may be issued in smaller or larger volume than the estimated total nominal value of the issue. The possible increase in the volume of the issue is set up to 30 000 000 000 CZK (in words: thirty billion Czech koruna).
  13. The bonds will be redeemed at their nominal value on 17 March 2018. The interest of bonds ends on this date. The Issuer decided in accordance with s. 17 of the Bonds Act that the right to redemption of the bond has the person who is entitled to exercise the rights related to the bond on 15 February 2018. If the date of repayment of the nominal value of the bonds falls on a day which is not a working day, the repayment will be made on the next working day without the entitlement to the proceeds for the deferred payment.
  14. The Issuer undertakes to ensure the payment of the yields of bonds and the repayment of the nominal value of bonds according to these issuance terms to persons who are by these issuance terms entitled to exercise the relevant rights related to the bond exclusively in CZK or other currency, that will be the official currency of the Czech republic on the date of respective payment. The redemption and yield payment is ensured by the Czech National Bank and the Ministry. The nominal value of the bonds will be repaid and the yields of bonds will be paid by cashless transfer or in cash, according to the instructions of persons who are entitled to exercise the relevant rights related to the bond on the date set by these issuance terms. The payment place is the Czech National Bank that will publish the method of repayment of the nominal value and payment of the yields of the bonds.
  15. Valid rating of long-term obligations denominated in CZK on the date of defining these issuance terms is at AA level by Standard & Poor's, at A1 level by Moody's and at AA- by Fitch Ratings.
  16. The bonds are direct, unconditional and unsubordinated obligations of the Czech Republic, which are at the same level with all other existing and future direct, unconditional and unsubordinated obligations of the Czech Republic.
  17. All rights related to the bond are subject to limitation of ten years from the date on which they could be exercised first pursuant to s. 42 of the Bonds Act.
  18. The Ministry announces these issuance terms in the Collection of Laws. All the announcements to the owners of bonds and to the public regarding the bonds are published in the Czech language on the website of the Ministry, in the section where information on issued government bonds is published.
  19. These issuance terms may be translated into foreign languages. In case of any discrepancy between various language versions of issuance terms, the Czech version shall prevail.

 

Minister of Finance

Ing. Andrej Babiš