News | Wednesday, 04 March 2009

Impending rate cut paves way for €95m stock issue

The €95 million bond issue by the government has coincided with an impending interest rate cut tomorrow by the European Central Bank.
Observers say the issue of €70 million in government stocks, together with an over-allotment option of €25 million, coincides with yet another cut in interests rates which the governors of Europe’s central banks might be contemplating.
“The government offer has a good coupon as things stand now since the recent cuts in interest rates, but the offer is all the more attractive if Thursday marks yet another interest rate cut,” one financial services executive commented.
Additionally, a repatriation scheme of monies deposited abroad in 2007 also releases the funds kept by government in the coming weeks.
The Special Registration Scheme 2007 was launched by the Ministry of Finance in April 2007 to entice Maltese depositors to repatriate monies in foreign accounts.
The scheme provided individuals residing in Malta with an opportunity to regularise their position in respect of holdings and income not declared for taxation purposes. Their monies were held for two years in government accounts to accrue interest before being released back to holders.
“Although quite early in the year for government to be issuing stocks to the public, the issue coincides perfectly with the interest rate cut and the release of the registration assets to be re-invested in these stocks,” an executive who spoke to this newspaper said.
The government stocks come with a 3.6 per cent coupon for maturity in 2013 and a 5 per cent coupon for maturity in 2021.
The issue closes at 5pm, Wednesday 11 March for applications by any single and joint applications not exceeding €100,000 per person and at 12pm (noon) on Friday 13 March for sealed bids.
Application forms may be obtained from and lodged at all members of the Malta Stock Exchange and other authorised investment service providers or from the Treasury website on


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04 March 2009

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