The Estonian Ministry of Finance issued €375 million worth of treasury bills with a negative yield at auction on Wednesday.
On Wednesday, the treasury auctioned bonds worth €150 million for six months and €225 million for 12 months. The average yield to maturity on the former was -0,177 percent and on the latter -0,141 percent. 4 dealers submitted bids in all tenors.
The negative interest rate means purchasers will pay Estonia for the money the country has borrowed by issuing the bond.
LHV Bank purchased government bonds for €200 million. The bank said that the acquisition of bonds is a good opportunity for efficient placement of liquid resources, helping reduce the effects of the coronavirus crisis as a local provider of capital.
Compared to standby loans issued by banks, treasury bills provide a more affordable supplementary instrument for cash management.
The first short-term bonds were issued in spring 2019, Wednesday's issuance was the fourth for Estonia.
AS LHV Pank, AB SEB bankas, Swedbank AS, Luminor Bank AS and OP Corporate Bank comprise the list of recognised Dealers of Estonian Treasury Bills. Bonds are registered with the Nasdaq CSD SE Estonian Depository.
Editor: Anders Nõmm