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Ellex Advises Estonian Ministry of Finance on Short-Term T-bill Program

Ellex Advises Estonian Ministry of Finance on Short-Term T-bill Program

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Ellex Raidla has helped the Estonian Ministry of Finance draft the documents for Estonia’s short-term treasury bill program.

On June 17, 2019, the State Treasury of Estonia sold EUR 200 million worth of treasury bills with a negative yield at auction, which according to the Ministry of Finance means that the buyer of treasury bills is to pay interest to the State Treasury. 

Participators in the auction included LHV, Luminor, SEB, and Swedbank. The bidder offering the most favorable interest rate for the state will win the right to buy the debt instruments.

The Treasury auctioned EUR 100 million worth of treasury bills for six months with an average yield to maturity of -0.063 percent and another EU100 million for 12 months with an average yield of -0,19 percent.

The bonds are registered with the Nasdaq CSD SE Estonian Depository.

According to Ellex Radla, the Ministry of Finance confirmed the framework for the issuance of treasury bills for cash management purposes in April this year, which, if necessary, will allow the Treasury to use bonds with a maturity of up to one year. Compared to standby loans issued by banks, treasury bills provide a more affordable supplementary instrument for cash management.

The Ellex Raidla team was led by Partner Raino Paron.

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