At an auction held on March 30, the Estonian state sold 12-month bonds worth €400 million, more than half of which were acquired by the Estonian arm of Swedbank.
"Due to its high credit rating, the Estonian state is one of the safest customers to lend to and in terms of investing money, this is a good alternative to keeping money in the central bank," Marek Berkman, head of treasury at Swedbank, said in a press release.
These are bonds guaranteed by the European Central Bank and the average yield of the entire issue was -0.441 percent.
Swedbank is one of seven short-term bond dealers with a long-term cooperation agreement with the Estonian state. In addition to Swedbank, these include AS LHV Pank, AB SEB bankas, Luminor Bank AS, OP Corporate Bank, Erste Group Bank AG and Nordea Bank Abp.
Previously, the Treasury issued 6- and 12-month bonds worth €375 million on May 6 last year and €200 million worth of bonds in March of the same year, also in tenors of six and 12 months.
In June 2019, €200 million worth of bonds with terms of six, nine and 12 months were issued, and in May a 7-day issue in the amount of €4 million was carried out to identify potential operational risks.
According to the bank, Swedbank also acquired a small amount of bonds at the auction held on May 6 last year.
Editor: Helen Wright