Government bonds

About

With the role of financing the Romanian State's debt, government securities, from the perspective of an individual/legal entity investor, can be viewed as a savings alternative to bank deposits and/or monetary investment funds.

The risks associated with investing in government securities are very low, almost equal to zero. Furthermore, investing in such financial instruments benefits from the intrinsic guarantee offered by the issuer (Romania, through the Ministry of Finance), a guarantee that applies to all funds invested in these instruments.

As a rule, the nominal value of government securities is 5,000 or 10,000 lei, 1,000 euros, or 2,000 US dollars for those denominated in foreign currency.

There are two main categories of government securities:

Short-term government securities – these are discounted treasury certificates with maturities of up to 1 year (6 months, 9 months, 1 year). These are government securities that an investor buys at a price lower than their face value and then collects the face value at maturity. The difference between the two values represents the return on the investment.
Medium- or long-term government securities – these are government bonds with a maturity of more than one year, sold at face value, on which the government pays annual interest (known as a COUPON). As a rule, the coupon is paid annually, on the anniversary of the issue, in accordance with the terms and conditions set out in the issue prospectus.

The purchase of government bonds can be done in the following two ways:

Their purchase on the primary market – through Banca Transilvania in its capacity as primary dealer on the government securities market – is an unusual procedure for PF/PJ clients;
Their purchase on the secondary market —securities previously issued and already in circulation—is the procedure by which, as a rule, individual customers or non-financial companies purchase government securities due to lower costs.

Trading conditions

Completing and signing, as applicable, specific contracts (financial investment contract, custody contract) and their annexes, including providing all data and information requested in the account opening application;
Information on segregation of accounts of financial instruments
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Reading and acknowledging (by handwritten signature) the MiFID presentation document;
Completing questionnaires (profiling/suitability) presented at the start of the relationship/purchase of an investment product (in this case, government bonds);
Holding the amounts of money/financial instruments in the specific accounts necessary to carry out the transactions (including the equivalent value of the related commissions and/or any other fees due).

If the customer is a legal entity, it will only be able to carry out transactions after purchasing an LEI code (unique identification code for legal entities).

The LEI code is a unique 20-character identifier that is mandatory for legal entities conducting financial transactions.

Romanian and foreign legal entities can check the following websites for additional information:

Secondary market quotations

See the table of all secondary market quotations