From June, the Estonian Ministry of Finance will be able to issue international commercial paper notes, which will create more flexible borrowing opportunities for the state and a broader investor base, the ministry says.
Sven Kirsipuu, Deputy Undersecretary for Budget Policy at the Ministry of Finance, said: “Different flexible borrowing options and a broader investor base will ensure the best possible interest rates for state loans, which will ultimately mean lower costs for the state.”
The international Euro-Commercial Paper (ECP) Program enhances the state’s readiness to issue treasury bills in the international capital market in an operational and flexible manner and complements the existing domestic treasury bills program.
The program provides the option of repeated issuance of commercial paper notes with a maturity of between one and 364 days, to cover the short-term liquidity needs of the state. The notes can be denominated in Euros, US$, Pounds Sterling, or other currencies.
None of the issuing under the program is public while the ECPs are only aimed at professional investors. S&P Global Ratings Europe Limited assigned the program its highest short-term credit rating of A-1+.
ECPs are a form of unsecured, short-term debt issued by a bank or corporation in the international money market. Notably, ECPs are denominated in a currency that is different from the domestic currency of the market where the paper—debt security, or bond—is issued.
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