Turkish Treasury to issue gold bonds, lease certificates to individual investors from Sept 10

ANKARA

The Turkish Treasury will issue gold bonds and lease certificates to individual investors starting from Sept. 10 in a bid to diversify borrowing instruments, broaden investor base and bring idle gold into the economy, the Treasury and Finance Ministry has announced.

In a statement on Sept. 7, the ministry said the demand for securities will be collected in different rounds across Turkey through the designated branches of Ziraat Bank and Ziraat Participation Bank.

“The securities will be transferred to investors’ bank accounts on Wednesdays following the demand collection period of the related round. The investors will be paid TRY [Turkish Liras] denominated 1.20 percent semi-annual [2.40 percent per annum] returns indexed to gold price,” read the statement.

On maturity, investors may request the principal payment of one kilogram of gold bar (produced by refineries) or Republic Gold Quarter Coins printed by the Turkish State Mint, the ministry noted.

“In this case, the investors must inform the [respective] banks during the physical gold demand periods,” it added.

Investors who do not submit their physical gold demand during the specified dates, do not have the right to demand physical gold at the end of the maturity, read the statement, adding that for these investors, the securities would be redeemed to investors’ bank accounts in grams of gold on maturity.