Income Indexed Government Domestic Debt Securities Implementation Begins! What is an Income-Indexed Bill?

Income-Indexed Government Domestic Debt Securities Implementation Begins. What is Income-Indexed Securities?
Income Indexed Government Domestic Debt Securities Implementation Begins! What is an Income-Indexed Bill

The Ministry of Treasury and Finance stated that income-indexed government domestic debt securities will be issued, and the book-building process will be carried out as of June 15. The new instrument will only be available to real people.

The Ministry of Treasury and Finance will issue income-indexed government domestic debt securities.

In the statement made by the Ministry, in order to encourage citizens to use their savings in Turkish lira denominated assets and to expand the investor base, demand collection for government securities indexed to income will be carried out as of June 15.

This instrument, which will be offered only to natural persons, will be issued throughout the country through announcements and bookkeeping.

The bookkeeping for the year and the issuance of the bill, coupon and principal payments will be made through the banks that will be published on the Ministry's website and specified in the announcement.

The promissory notes to be issued will provide coupon income to its investors quarterly, and there will be a minimum return guarantee in coupon payments.

The rate of return and maturity structure that will form the basis for the coupon payment of the bill will be announced in the issuance announcement.

The final rate of return that the bill will provide to the investor will be determined by multiplying the rate of return determined by the Ministry at the issuance stage with the index value to be calculated within the framework of revenue realizations.

What is an income indexed bond?

In the information note from the Ministry of Treasury and Finance, the following information was given about the new instrument:

Income-indexed securities (GES): These are the securities whose returns are indexed to the revenue shares transferred to the budget of some State Economic Enterprises in order to diversify the Government Domestic Debt Securities and expand the investor base.

Income-indexed securities (GES) stand out as an alternative tool for citizens to direct their investments to TL-denominated assets.

The returns of SPPs will be indexed to the revenues of State Economic Enterprises with strong income performance and transferring revenues to the budget.

Thanks to the minimum return guarantee to be applied for coupons to be paid quarterly, citizens will be prevented from being adversely affected by changes in their income shares.

However, when the revenue performance transferred to the budget from the State Economic Enterprises subject to SPPs is higher than expected, additional returns will be offered to the investors.

Günceleme: 10/06/2022 11:25

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