of the Ministry of Finance
dated 10 January 2013
defining issuance terms of
“Government Bond of the Czech Republic, 2013–2028, 2.50 %“
The Ministry of Finance issues government bonds within the scope defined by particular 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, 2013–2019, 2,50 %:
Basic description of the bonds:
Issuer: Czech Republic – the Ministry of Finance (“The Ministry of Finance”)
Name: Czech Republic Government Bond, 2013–2028, 2,50 %
Short name: ČR, 2,50 %, 28
Serial number of issue: 78.
Face value: CZK 10 000
Form of bond: security on bearer
Type of bond: book-entered security
Category of bond: government bond
Currency in which the bonds are denominated: Czech Crown (CZK)
Beginning of the subscription period: 20 February 2013
Termination of the subscription period: 26 July 2028
Issue date: 25 February 2013
Maturity date: 25 August 2028
Yield of bonds: defined by fixed interest rate of 2,50 % p. a.
Taxation of yields: according to the laws of Czech Republic
Separated principal – ISIN CZ0000702790
Coupon No. 1 – ISIN: CZ0000702808
Coupon No. 2 – ISIN: CZ0000702816
Coupon No. 3 – ISIN: CZ0000702824
Coupon No. 4 – ISIN: CZ0000702832
Coupon No. 5 – ISIN: CZ0000702840
Coupon No. 6 – ISIN: CZ0000702857
Coupon No. 7 – ISIN: CZ0000702865
Coupon No. 8 – ISIN: CZ0000702873
Coupon No. 9 – ISIN: CZ0000702881
Coupon No. 10 – ISIN: CZ0000702899
Coupon No. 11 – ISIN: CZ0000702907
Coupon No. 12 – ISIN: CZ0000702915
Coupon No. 13 – ISIN: CZ0000702923
Coupon No. 14 – ISIN: CZ0000702931
Coupon No. 15 – ISIN: CZ0000702949
Coupon No. 16 – ISIN: CZ0000702956
Bonds are issued based on special laws in accordance with s. 25 (2) of the Bonds Act.
Bonds have form of security on bearer, are entered in a book and registered in the central depository of securities maintained by the Central Depository of Securities (Centrální depozitář cenných papírů, a.s.) 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.
Bonds may be acquired by legal or natural persons with their seat or residence in the territory of Czech Republic as well as abroad (hereinafter referred to as the "Investors"). Repatriation of yields and of paid-up face value to abroad are to be carried out in accordance with the laws of Czech Republic.
Right to payment of the yield of bond has the person who is entitled to exercise this right on 26 July starting as of 2013. Right to payment of the yield of bond for the period commencing on the issue date to 25 August 2013 has the person who is entitled to exercise this right on 26 July 2013. Transferability of the bonds after 26 July 2028 is excluded.
The yield of bond is defined by fixed interest rate of 2,50 % p.a. The yield of bond is paid once a year, always on 25 August starting as of 2013. If the date of payment of the yield falls on a day which is not working day, the payment of the yield will be made on the next working day without the entitlement to the proceeds for the deferred payment.
Calculation of the proportional yield of bond is set on the basis of a year of 360 days and 12 months each of 30 days (BCK - 30E/360). The proportional yield of bond is counted in the bond price from the issue date.
The issue of bonds will be issued within the subscription period gradually (in tranches).
The issue rate is to be determined by the price achieved in the auction.
The bonds will be offered for subscription in the Czech Republic. The bonds will 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 period of delivery of bonds 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. Primary sale of the first tranche will be carried out in the form of american auction organized on 20 February 2013 by the Czech National Bank for a group of primary dealers. Other investors may participate in the auction of bonds through primary dealers. Announcement of auction will be published in advance. Primary sale of subsequent tranches will be carried out under the same conditions.
The estimated total nominal value of the issue of bonds (the volume of the issue) is CZK 120 000 000 000 (in words: one hundred and twenty billion Czech crowns). The bonds may, in accordance with § 7 of the Bonds Act, be issued in smaller or larger volume of the issue than the estimated total nominal value of the issue of bonds. The possible increase of the volume of the issue is set up to 40 000 000 000 CZK (in words: forty billion Czech crowns).
The bonds will be redeemed at their nominal value as of 25 August 2028. The interest of bonds ends on this date. The Ministry of Finance decided in accordance with s. 17 of the Bonds Act that the right of redemption of the bond has the person who is entitled to exercise this right as of 26 July 2028. If the date of repayment of the nominal value of the bonds falls on a day which is not working day, the repayment shall be made on the next working day without the entitlement to the proceeds for the deferred payment.
All rights connected with the bonds 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.
The Ministry of Finance undertakes that under these issuance terms will ensure the payment of the yields of bonds and the repayment of the nominal value of bonds to persons who are by these issuance terms entitled to exercise the relevant rights connected to bonds. The payment place is the Czech National Bank. The nominal value of the bonds will be repaid and the yields of bonds will be paid by bank transfer or in cash, according to the instructions of persons who are by these issuance terms entitled to exercise the relevant rights connected to bonds. The Czech National Bank will publish the method of repayment of the nominal value of the bonds and the payment of the yields of bonds.
Valid rating of long-term obligations denominated in CZK as at the date of defining of these issuance terms carried out by Standard & Poor's is at AA level, by Moody's at A1 level and by Fitch Ratings at AA-.
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.
The Ministry of Finance announces these issuance terms in the Collection of Laws. The announcements to the public regarding the bonds are published on the website of the Ministry of Finance.
These issuance terms may be translated into foreign languages. In case of any discrepancy between various language versions of issuance conditions, the Czech version shall prevail.
Minister of Finance
Ing. Miroslav Kalousek