Investors earned a total of €16 million in proceeds from government bonds
Today, the capital market saw the first-ever payment of proceeds from bonds purchased by citizens during last year’s historic first issuance of government bonds. The payment of yields was carried out through Centrálny depozitár cenných papierov SR (CDCP). The Debt and Liquidity Management Agency (ARDAL) utilized this new service for the payment of yields from the Investor and Patriot issues. The total amount of yields paid reached EUR 16 million. This is another step toward harmonizing the Slovak and European markets, as well as simplifying the handling of Slovak securities for both domestic and foreign investors.
The payment of bond yields through a central securities depository is standard practice abroad. The CDCP has introduced this service in accordance with domestic legislation and international standards governing the processing of securities yields. In providing this service, it cooperates with its participants, who play an important role in distributing the proceeds to end investors.
“Specifically, this means that the central securities depository distributes bond proceeds based on the volume of securities held by individual participants and transfers the corresponding amount to the participants in whose records the investors’ accounts are maintained,” explains Peter Nagy, Director of the Operations Department at CDCP. Subsequently, participants ensure the distribution of proceeds to beneficial owners or other intermediaries, and this process continues until the proceeds reach the beneficial owner. If a participant has provided the depository with the bank account numbers of the beneficial owners, or if the beneficial owner holds an account with CDCP, the depository pays the proceeds directly into the investor’s bank account.
The introduction of this service brings greater transparency and efficiency to securities settlement while also simplifying access to Slovak bonds for foreign investors. “As a result of the harmonized procedure for paying out yields, these processes are becoming familiar to foreign intermediaries as well, which may boost interest in Slovak securities,” adds Peter Nagy.
In preparing the service, the CDCP worked closely with the issuer, ARDAL, as well as with the participants involved in the distribution of bonds to the public. The launch was preceded by modifications to the CDCP’s information systems and thorough testing of all processes. The result is a modern service that takes into account the specific characteristics of the Slovak market while bringing it closer to the standards of developed European countries.
