Issuance Conditions of 48. Issue of Treasury Bonds - T-Bond 3.25 %, 09 - CZ0001001754

"Czech Republic Treasury Bond, 2006 - 2009, 3.25 %"

The Ministry of Finance, in accordance with § 25 of Act No. 190/2004 Coll., on Bonds as amended (hereinafter only Bonds Act) determines issuance conditions of Czech Republic Treasury Bond, 2006-2009, 3.25 %:

1. Basic characteristics of bonds:
   Issuer: Ministry of Finance on behalf of the Czech Republic
   Name: Czech Republic Treasury Bond, 2006-2009, 3.25 %
   Name in short: ČR,3.25 %, 09
   Serial number of issue: 48
   Face value: CZK 10 000
   Form of bond: bearer
   Type of bond: book-entered
   Date of issue: 27 November 2006
   Date of maturity: 27 November 2009
   Interest yield: coupon with fixed interest rate of 3.25 % p.a.
   Taxation of interest yields: under legal regulations of the Czech Republic
   ISIN: CZ 0001001754
2. Bonds are issued in terms of § 25, paragraph 2 of Bonds Act, based on particular acts that allow treasury bonds issuance.
3. Bonds are on bearer and are issued in book-entered form. The holder register is kept by the Prague Securities Centre.
4. Bonds may be acquired by legal or natural entities with their seat or residence in the territory of the Czech Republic as well as in abroad. Repatriation of yields and of paid-up face value to abroad shall be carried out under legal regulations of the Czech Republic.
5. Issuer submits a proposal for receipt of a bond on Prague Stock Exchange trading.
6. Bonds have fixed interest rate of 3.25 % p.a. Interest yields shall be paid once a year, each time by 27 November of the respective year. In case the day of the payment of yield falls on a non-working day, the payment shall be carried out on the first consecutive working day with no claim to yield for the payment deferred as above.
7. The decisive day for the payment of bond yield precedes by one month the day of maturity of bond yield. The ex-coupon date is the day following the decisive day, and it is fixed to be 28 October. The investor who is bond holder on 27 October shall receive the interest yield. The investor who is bond holder on 27 October 2007shall receive the interest yield for the first year.
8. Transferability of bonds in the Prague Securities Centre shall commence as of the day of crediting the respective bonds in the accounts of first holders. The last day, when transfers of securities in holder accounts in the Prague Securities Centre shall be carried out, shall be 27 October 2009.
9. The calculation of the proportional part of interest shall be made on the basis of a year with 360 days and of 12 months per 30 days (BCK - standard 30E/360). The proportional part of interest yield shall be added to the price of the respective bond as of the date of issue.
10. Bonds shall be issued per single tranches. Primary sale of 1. tranche shall be carried out in the form of auction organized by the Czech National Bank for a group of direct participants on 22 November 2006. Other investors may participate in the auction through direct participants. The announcement on the auction and the list of direct participants shall be published in advance. Primary sale of subsequent tranches shall be carried out under the same conditions. The issuance period shall be terminated by the day of 29 October 2009.
11. The particular given-out orders to auction by Primary dealers are settled gradually according to their highest offered price. As long as the bids with a certain price exceeds the offered volume of bonds, that issuer wants to sell, the bids with those higher offered price are cut off and then only partially fulfiled. The bonds are sold at offered prices.
12. The total anticipated volume of the bond issue is CZK 45 000 000 000. The Bonds can be issued for lesser or larger volume in accordance with § 11, on Bonds Act and in a such quantity that correspondens with developement and structure of financing of State Budget Deficit. The issue volume can be raised up to 60 000 000 000 CZK.
13. Validation of domestic currency long-term rating was carried out and published by Standard and Poor´s company at the level of A+ and Moody´s at the level A1.
14. Detachment of the right to bond yield under § 18 on Bonds Act cannot be applied.
15. The Ministry of Finance declares that it owes to each bond holder the face value of the respective bond. The bonds shall be paid up in the face value by the day of 27 November 2009. The interest terminates as of that day. The face value of the bond along with the last interest yield shall be paid to the bond-holder investor on 27 October 2009. In case the day of the payment of principal falls on a non-working day, the payment shall be carried out on the first consecutive day with no claim to yield for the payment deferred as above.
16. All rights connected with bonds and coupons issued in relation with § 42 of Bonds Act shall become statute-barred with the expiration of ten years since the day when such rights could be applied for the first time .
17. The Ministry of Finance pledges to ensure the payment of bond interest yields and to pay up the face value of bonds to the holders thereof in accordance with the present issuance conditions. The place of payment is the Czech National Bank. The place of payment shall publish the method by which the payment of the coupon and the settlement of the face value shall be carried out.
18. The bonds are direct, unconditional and unsubordinated obligations of the Czech Republic that are of the same standard with all other existing and future direct, unconditional and unsubordinated obligations of the Czech Republic.
19. Announcements for the public relating to these bonds shall be published in Hospodářské noviny or in another daily of similar orientation currently available in the Czech Republic and in the way that allows remote access
20. These issuance conditions may be translated into foreign languages. In case of variance between various language versions of issuance conditions, the Czech version shall be decisive.

Minister:
Ing. Vladimír Tlustý, CSc.