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Market of Government Securities 

The following types of securities represent the market of Government securities of the Kyrgyz Republic: 

· STB - State Treasury Bills  

· Bonds - State Treasury Bonds  

· Government Securities (restructuring) 

· TO - Treasury Obligations 

· NBKR Notes  

The STBills are the short-term (3, 6, 12 months) discount Government securities of the Kyrgyz Republic, with the par value of 1 STB equal to Som 100. The STB are issued as paperless securities as entries in accounts

The Ministry of Finance of the Kyrgyz Republic is an emitter of STB. The National Bank of the Kyrgyz Republic (NBKR) is a general agent for servicing STB issues. The STB issues are accommodated weekly through auctions held by the NBKR. Primary dealers, finance and credit institutions and other institutions, that signed an agreement with the NBKR, have the right to participate in the STB auctions. Commercial banks - residents of the Kyrgyz Republic - that satisfy the requirements set by the NBKR and maintain STB liquidity in the secondary market are the primary dealers. 16 Primary Dealers have been registered thus far. The finance and credit institutions are the commercial banks and institutional investors (investment and pension funds, insurance companies and financial institutions) that signed an agreement with the NBKR on transactions in the STB market.  

Both legal entities and individuals may be STB holders in the Kyrgyz Republic. Access for foreign investors to the STB market is not limited. The STB are purchased by the investors only through the Primary Dealers, at the auction (during their primary placement), or in the secondary market. 

Transactions in the STB secondary market are conducted through the NBKR' electronic trading system that allows the Primary Dealers and their clientele to conduct the STB purchases or sales from their offices. The National Bank performs functions of a Central Depository. The primary dealers act as sub-depositories performing the functions of storing and accounting holdership of securities by investors. 

The Bonds are the long-term (above 1 year) coupon Government securities of the Kyrgyz Republic. The Bonds are issued as paper and paperless securities (as entries in accounts)

The Ministry of Finance of the Kyrgyz Republic is an emitter of Bonds. The National Bank of the Kyrgyz Republic (NBKR) is a general agent for servicing Bonds issues. The Bonds issues are accommodated through auctions held by the NBKR. Primary dealers. finance and credit institutions and other institutions that signed an agreement with the NBKR have the right of participation in the auctions.  

Both legal entities and individuals may be Bonds holders in the Kyrgyz Republic. Access for foreign investors to the Bonds market is not limited. The Bonds are purchased by the investors only through the Primary Dealers, at the auction (during their primary placement), or in the secondary market. 

Government Securities (restructuring) As a result of restructuring debt of the Government of the Kyrgyz Republic to the NBKR, the MOFKR issued on December 23, 2002, the following securities:  

· Roll-Over State Treasury Bills (restructuring);  

· Treasury Bonds of the NBKR series (restructuring);  

· Treasury Bonds of the NBKR series (restructuring);  

1. Roll-Over State Treasury Bills (restructuring) (STBr) are the Government securities that are basically similar to Treasury Bills (STB), issued by the MOFKR on a regular basis. The STBr are issued by the MOFKR in favor of the NBKR. The fact that these securities are rolled-over means that on the date of redemption of the STBr held in the NBKR's portfolio the MOFKR would issue at the same time the new series of the STBr in favor of the NBKR to the number of the redeemed securities. The STBr will be rolled-over during the whole period of the State Treasury Bills (restructuring). The NBKR has the right to use the RTBr for the REPO operations for the monetary policy purposes.  

The STBr are the coupon securities with the following characteristics:  

Form of issue: paperless;  

Nominal value: Som100;  

Maturity: 3 months, 6 months, and 12 months;  

Date of issue: the same calendar days, when the STB are issues.  

Payment of interest on STB is made simultaneously with repayment of principal. The base "actual number of days/365 (366) days" is used to calculate the interest (coupon) payments.  

Under agreement with the MOFKR, depository accounting of STB is kept with the NBKR.  

2. Government Treasury Bonds of the NBKR series (restructuring) (GTBr) are the mid-term coupon securities issued as paperless securities with the floating coupon rate equal to annual inflation - the period of March to March plus two percent. In case if inflation is determined as negative, the coupon rate is assumed as equal to two percent annual. The coupon payments are made on the annual basis on April 23. The base "actual number of days/365 (366) days" is used to calculate the interest (coupon) payments.  

The GTBr are issued in series once in three years. Each series consists of three securities with maturity of one, two, and three years, correspondingly, with maturity of securities of the first series extended by 4 months. The securities are redeemed on the 23rd of April, each - according to its maturity. The GTBr of the new series are issued on the date of redemption of the third (three year) security of the previous series.  

One-year and two-year securities are redeemed in whole. The third security is redeemed to the tune of the balance accumulated by the date of redemption on the account opened by the MOFKR with the NBKR, and the security might be redeemed in advance fully or partially. The unredeemed part of the third security is converted into the new series of the GTBr. The new series are issued until the full redemption of the GTBr.  

3. Government Treasury Bonds of the "Jibek Jolu" series (GTB "Jibek Jolu") is the mid-term coupon security issued as paperless security at the floating coupon rate equal to annual inflation - the period of March to March plus three percent. In case if inflation is determined as negative, the coupon rate is assumed as equal to three percent annual. The coupon payments are made on the annual basis on April 23. The base "actual number of days/365 (366) days" is used to calculate the interest (coupon) payments.  

Maturity of the GTB "Jibek Jolu" is 5 years and 4 months and they are redeemed before April 23, 2008. The security redeemed fully.  

The Treasury Obligations are the Government securities, issued by the Ministry of Finance in compliance with the Regulation "On Procedure for Emission, Circulation, and Redemption of Treasury Bonds of the Ministry of Finance of the Kyrgyz Republic" approved by the Government of the Kyrgyz Republic. The TB are the registered, documentary securities.  

The Ministry of Finance does the primary placement and registration of transactions in the secondary market of TB directly. 

The NBKR Notes are the short-term securities, which are issued by the NBKR as paperless securities and are used as a monetary policy instrument designated to regulate money supply. 

The nominal value of one note is Som 10 000. The notes are issued for 7, 14, 28 days and are placed with a discount and are redeemed at par value. The notes are placed through the weekly auctions. The right of participation is granted to the commercial banks, primary dealers, as established by the relevant NBKR provisions, and the finance and credit institutions that are licensed by the NBKR and have the correspondent/current accounts with the NBKR. 

The Government of the Kyrgyz Republic is not responsible for the NBKR Notes.