Bonds for retail investors

Greece said yesterday it plans to make available up to 4 billion euros in government bonds to retail investors and also launch savings bonds up to a value of 2.5 billion euros this year in a bid to shore up Greeks’ depleted savings. Announcing the opening of the primary market in government bonds to retail investors, Finance Minister Nikos Christodoulakis said the offerings will broaden the choice of investment products to individuals. Such issues are already available in France, the UK and some of the Scandinavian countries. The State will set aside government bonds worth a total of 4 billion euros to retail investors this year, he said. The paper, ranging from three-month treasury bills to 20-year bonds, will be allocated to investors on a pro-rata basis. Investors will be waived the 10 percent tax on the dividend in the event they hold onto the paper for its duration. The tax break is also valid for individuals who purchase the bonds from banks up to five days after they are issued and keep them for 12 months. The bonds will be made available to the public three days before they are auctioned off. Investors can buy up to 10,000 euros worth of bonds, with the banks setting aside up to 20 percent of the issue for the retail sector. The yield will also incorporate the commission paid by the State to banks, estimated at 0.15-0.45 percent. Three issues of one-year savings bonds will be launched this year, in February, May and September. «The yield will be slightly above inflation, below 4 percent,» Christodoulakis said. The savings bonds will be tax-free for individuals who keep them for a year. They will not be traded on the secondary securities electronic market. The maximum amount available per investor is 10,000 euros.

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