Government bonds for the elderly snapped up – amount exceeded by €5.5 million
The bonds issued in the past days by Government for persons aged 62+ have all been taken up. The applications by pensioners exceeded by 5.5 million euro the highest amount on offer of 100 million euro.
Finance Minister Edward Scicluna told TVM that this amount had greatly exceeded last year’s amount. Professor Scicluna explained that when one considers the combined three editions of special bond issues, pensioners have to date 300 million euro in savings with Government at a better rate of interest than that offered by the banks.
The more advantageous rates of interest are 3% for five years.
Three days after the closing date for take-up of these bonds, Minister Scicluna stated that Government had initially offered 65 million euro, with the proviso that if this amount was all taken up, the amount would go up to 100 million euro. Professor Scicluna added that the amount was fully taken up and even exceeded.
“The bond has been oversubscribed, meaning the demand for purchase exceeded more than that offered by Government. We offered 100 million euro, and this has been exceeded by 5.5 million euro.”
The maximum individual investment was 10,000 euro. Priority has been given to those who to date did not have an opportunity to invest in the previous two bond issues. We asked Professor Scicluna how the bonds would be allocated, and how the 5.5 million euro exceeding Government’s offer will be distributed.
“Persons who have never to date purchased bonds will be allocated the full amount, even up to the 10,000 euro maximum. Others who had previously purchased may be allocated a lesser amount. This will be allocated fairly, meaning the five million will be distributed among previous purchasers, and their bond will be slightly reduced. This, however, is ten million more than last year, and we can say we now hold 300 million euro, with pensioners having 300 million euro saved up with Government and with a much better interest than the market rate.”
These bonds cannot be either redeemed or sold before maturity, except in cases of death or serious illness.
Professor Scicluna told TVM that until the interest rate offered by Government remains far better than the market rate, Government plans to continue offering these bonds to persons aged 62+ in the coming years.