2024.05.08. 14:00
Discount Treasury Bills are government securities with maturity less than one year. No interest is paid on these securities; instead, they are issued at a discount, however, they may be issued under, at, or above face value. Face value is repaid on the redemption date. The denomination of Discount Treasury Bills is HUF 10,000. Since 12 April, 1999 Discount Treasury Bills have been issued in dematerialised form.
Discount Treasury Bills are available to resident and non-resident individuals, legal entities, and non-incorporated economic associations. Non-residents may buy and sell government securities throughout the whole maturity period under the terms and conditions specified in the relevant Hungarian legislation.
Currently Discount Treasury Bills are issued for different tenors, namely 3, 6 and 12 months, but due to the active secondary market of these securities they are available on the secondary market for practically any possible residual maturity until one year.
Those Discount Treasury Bills which have a remaining maturity of
- up to 135 calendar days being calculated from the date of the settlement are referred to as 3 months Discount Treasury Bills;
- up to 224 calendar days being calculated from the date of the settlement are referred to as 6 months Discount Treasury Bills;
- up to 365 calendar days being calculated from the date of the settlement are referred to as 12 months Discount Treasury Bills.
Discount Treasury Bills with a residual maturity of up to 90 calendar days from the settlement date, originally issued with a residual maturity of 3 or 12 months, issued for a series of 5 Discount Treasury Bills by way of additional placement, with a maturity of less than 91 days are referred to as Liquidity Discount Treasury Bills.
Since the end of 1988 Discount Treasury Bills have been issued at auctions. ÁKK Zrt. organises the auctions of 6-month and 12-month Discount Treasury Bills on a bi-weekly basis, and the auctions of 3-month Discount Treasury Bills on a weekly basis, while the Liquidity Discount Treasury Bills are organised occasionally, at the decision of ÁKK Zrt.
Discount Treasury Bills will also sold in weekly exchange auctions starting from 13 May 2024, based on the current financing plan and market situation.
Only Primary Dealers may participate directly at the Hungarian Government Bonds auctions, investor should submit orders through the PDs.
ÁKK publishes the serial number, the ISIN-code of the Discount Treasury Bills to be issued, the terms and conditions of the placement of the given series - including especially the amount announced for sale at the auction, the date of the auction and the issuance (performance), the deadline for submitting the bids, the maturity of the securities - in public offering (hereinafter: the “Public Offering”) at least 3 working days prior to the date of the auction.
The Issuer reserves the right to deviate from the quantities announced or to declare the auction unsuccessful, depending on the bids received.
Discount Treasury Bills with an original maturity of more than 92 days are listed on the Budapest Stock Exchange from the date of the settlement, as well as on the multilateral trading system called “MTS Hungary” operated by MTS SpA on the day of the auction and on the regulated market called “Bond Vision Market” operated by MTS SpA on the day of the first auction.
The network of Primary Dealers and the Hungarian State Treasury quotes daily bid and ask prices for the series of Discount Treasury Bills, so they can sell and buy Discount Treasury Bills during the maturity period as described in their rules of operation.
ÁKK Zrt. pays the redemption (the nominal value) to the investors through KELER Zrt. and the investment companies.
The Issuer and ÁKK Zrt. reserve the right to issue from time to time additional Discount Treasury Bills, which shall constitute a series identical to the relevant Discount Treasury Bill series, with rights identical in all respects to those of the series of Discount Treasury Bills, except for the date of issue.
ÁKK Zrt. will publish announcements relating to the issuance of Discount Treasury Bills on its websites (www.akk.hu and www.allampapir.hu) and on the website of BSE (www.bet.hu), as well as on the website of the MNB (kozzetetelek.mnb.hu).
Any conditions on tax accounting or tax consequences related to Discount Treasury Bills can only be judged on the basis of the specific circumstances of the investor concerned and may change subject to tax legislation.
Interest income on series of Discount Treasury Bills put into circulation after 1 June 2019 is not considered as income and is therefore exempt from interest tax. The relevant series of Discount Treasury Bills issued after 1 June 2019 are exempted from the obligation to pay the social contribution tax set out in Act LII of 2018 on Social Contribution Tax.
List of Primary Dealers involved in trading of government securities: