Government securities are debt instruments issued by the executive branch to meet its funding needs. As a form of government debt, they are used to:
- finance budget deficits
- finance investment projects and specific programs
- refinance outstanding government debt on or before the maturity date
- ensure payments under enforceable government guarantees
- support the country’s balance of payments.
Government securities entitle their holders to receive monetary income through a discount from the face value and/or through the payment of a fixed or floating coupon (interest). Due to their high liquidity and the government’s guarantee of repayment, government securities are the dominant instrument in the financial markets. Investors in government securities most often include commercial banks, insurance companies, pension and investment funds, companies from various business sectors, and individuals. Detailed information about government securities and the risks associated with them, as well as other important documents, can be found in the “Documents” section below.
Trading in government securities is facilitated by primary dealers—banks and investment intermediaries—who are authorized to purchase government securities directly at government securities auctions organized by the Bulgarian National Bank. Primary dealers are selected once a year by a commission appointed by the Minister of Finance, in accordance with criteria established by the Minister.
Postbank has been a primary dealer in government securities since 1996. In its capacity as a primary dealer, Postbank provides its clients with the following services:
- Participation with competitive and non-competitive bids in auctions for the sale of government securities
- Participation with competitive bids in auctions for the repurchase of government securities prior to their maturity
- Participation in subscriptions for the exchange of government securities.
In addition to the primary market for government securities, investors can also buy or sell their government securities on the secondary market. As one of the most active participants in the secondary market for government securities, Postbank offers its clients:
- up-to-date “bid” and “ask” quotes across the entire yield curve
- a narrow spread between “bid” and “ask” quotes
- the option to hold government securities owned by clients
- transactions related to changes in government securities registries.
For questions and additional information, please contact the Treasury Department.
- 02/81 66 498
- 02/81 66 485
e-mail: Treasury_Sales@postbank.bg
Foreign government securities are debt instruments issued and guaranteed by foreign governments to cover government expenditures or refinance debt. Government securities entitle their holders to receive cash income through a discount from the face value and/or through the payment of a fixed or floating coupon (interest). Government securities are generally lower-risk than corporate securities because they are guaranteed by a sovereign. At the same time, they offer significantly greater liquidity. Detailed information about government securities and the risks associated with them, as well as other important documents, can be found in the “Documents” section below.
Postbank customers have the opportunity to participate directly in international debt markets in Europe, North and South America, and Asia. The bank offers its customers:
- purchase and sale of foreign government securities on international debt markets
- competitive quotes
- custody of foreign government securities
For questions and additional information, please contact the “Treasury” department.
- 02/81 66 498
- 02/81 66 485
e-mail: Treasury_Sales@postbank.bg
Bonds entitle their holders to receive cash income through a discount from the face value and/or through the payment of a fixed or floating coupon (interest) in accordance with the offering prospectus. As a rule, bonds are less risky than shares issued by the same issuer because, in the event of the issuer’s insolvency, bondholders are paid before shareholders. Detailed information about the bonds and the risks associated with them, as well as other important documents, can be found in the “Documents” section below.
Depending on the issuer, bonds are classified as:
- Corporate - issued by companies to finance their operations
- Municipal - issued by local government bodies (municipalities). There are two main types of municipal bonds: bonds secured by tax revenues and bonds secured by budget revenues
- Mortgage bonds - issued by banks and secured by a portfolio of mortgage loans
By coupon type:
- Discount bonds - pay income in the form of a discount from their face value, and at maturity, the issuer pays the full face value
- Fixed-coupon bonds
- Floating-rate, based on a specified interest rate benchmark or other variable as set forth in the issuer’s prospectus
By principal repayment method:
- Lump sum at maturity
- In tranches
By collateral:
- Unsecured
- Secured
Depending on the rights or obligations embedded in them, as specified in the offering prospectus:
- With the right of the holder to sell a specified face value to the issuer on a specific date or within a specified period at a predetermined price
- With the right of the issuer to repurchase a specified face value on a specific date or within a specified period at a predetermined price
Postbank customers have the opportunity to participate in the bond market in Bulgaria, as well as in Europe, North and South America, and Asia. The bank offers its customers:
- purchase and sale of corporate securities on regulated and unregulated (over-the-counter) markets
- competitive quotes
- securities custody
For questions and additional information, please contact the Treasury Department.
- 02/81 66 498
- 02/81 66 485
e-mail: Treasury_Sales@postbank.bg