Government securities

The government securities are debt instruments issued and guaranteed by the Government of the Republic of Albania. Government securities are issued in the form of Treasury bills and bonds, in both foreign and domestic currency.

Treasury bills are short-term financial instruments with 3, 6 and 12 month maturity. The yield from this instrument is calculated as the difference between the nominal value and the acquisition price of the coupon.

Bonds are medium-term and long-term financial instruments with 2, 3, 5, 7, 10 and 15 year maturity. The yield, in the form of a coupon, is paid every 6 months during the lifetime of the instrument. Generally, bonds are issued with a fixed coupon, i.e. with a fixed interest rate throughout the lifetime of the instrument.  But, they may be also issued with a variable coupon. In this case, the interest rate is variable and is defined every year as the sum of the variable index rate and a fixed margin that is defined in auction.

The index rate is calculated before the auction date re-determining the variable bond coupon, as the weighted average of the 12 month Treasury bills of the last three auctions.

In the capacity of the Government’s fiscal agent, the Bank of Albania is responsible for the organisation of the auctions, settlement and keeping of the electronic registry of government securities issued in the domestic market.