Treasury Bills and Government Bonds issued by the Republic of Kosovo

Treasury Bills are short-term securities, with a maturity period of less than a year from the date of their issuance on the market. They are issued with maturities of: 3 months, 6 months, and 1 year. The treasury bills are purchased at a price which is lower than their nominal value at maturity; when they mature, the government pays their nominal value. Interest earned on the bills is the difference between the purchase price and the nominal price due and payable by the government on the maturity date.

Government bonds are long-term securities with a maturity that exceeds 1 year. When investors buy these securities, they are in fact providing a loan to the government, benefiting from periodic interest (on one or more specific dates throughout the year) in the form of interest coupons. On the date the bonds mature, the investors receive the full amount invested in the beginning.

How to buy securities

• Through the primary market: Clients may purchase government securities directly at auctions through banks that are primary actors.
• Through the secondary market: Clients who hold government securities may trade them among themselves.

In both cases, the transaction must be carried out through banks that are primary actors.

Purchasing securities through ProCredit Bank:

• Prior to applying to any particular auction, clients must open a bond account with ProCredit Bank linked to their current account.
• Clients must visit one of the branches providing this service and file their request to participate in a securities auction.
• The bond account shall be used by clients only for transferring the necessary and sufficient funds when the securities auction takes place (or when they want to buy a security in the secondary market), for the auction for which they previously filed a request at a ProCredit branch.
• Once the auction is concluded, clients receive information from ProCredit Bank on the results of the auction that took place.
• If clients decide to invest in securities, the funds shall be held by the Ministry of Finance until the instrument has matured, and their bond accounts will be credited with the relevant nominal value on the day of the investment. 

An example of purchasing securities:
Amount of investment: EUR 100,000.
Annual interest: 1.5%
Investment days: 182 days (6-month Treasury Bill)
Purchase price: 100,000 / (1+ 1.5 % /365*182) = EUR 99,257.61

On the day of the investment, EUR 99,257.61 are blocked in or transferred from the client’s account to the Ministry of Finance and on the day of maturity the client’s account is credited in the amount of EUR 100,000. The interest earned on this investment is EUR 742.39. (EUR 100,000 – EUR 99,257.61 = EUR 742.39). For information on the announcement and results of the Kosovo Securities Auctions, click here.

For more detailed information on purchasing Government Securities through ProCredit Bank, please contact us directly at: + 381 (0) 38 555 777 ext. 55038 and 55042.