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glossario

Glossary

Accrued Interest – interest earned since the last coupon date and the settlement date of a transaction.

 

AforroNet - Service that IGCP, E.P.E. offers to its retail clients to make subscription requests,  changes of address and portfolio's consultation of  Savings Certificates and Treasury Certificates, through the website AforroNet.

 

Average Life weighted average time to maturity of the debt portfolio.

 

Average Time to Next Refixing – weighted average of the time to the interest rate reset date (to the maturity date in the case of fixed-rate contracts) of the loans and other operations in the portfolio.

 

Certificado Especial de Dívida Pública (CEDIC) – short-term public debt instrument, with maturity up to one year, for subscription exclusively by entities in the public sector.

 

Certificado Especial de Dívida de Médio e Longo Prazo (CEDIM) – medium and long term public debt instrument, with maturity of at least eighteen months, for subscription exclusively by entities in the public sector.

 

Coupon – interest paid periodically to the security holder.

 

Euro Medium Term Notes (EMTN) - flexible financing instrument for issuing medium and long term government debt securities. Securities issued under this program can have different features compared to Treasury Bonds, such as different interest rate structures and denominations in multiple currencies.

 

Euro Commercial Paper (ECP) – short-term financing instrument, with maturities ranging from 1 to 364 days, issued at a discount, which can be denominated in multiple currencies and its placement is carried out by a limited number of authorized financial intermediaries.

 

Environmental, Social and Governance (ESG) - Environmental, social, and governance (ESG) criteria used to assess sustainable practices.

 

Fixed Rate Government Bond (OT) – security representing a medium to long term Republic of Portugal loan, with a face value of EUR 0.01. OT are placed through auctions, syndicates or by tap. It can also be referred to as PGB (Portuguese Government Bond).

 

Floating Public Debt – public debt contracted to be fully redeemed until the end of the budgetary period in which it was incurred.

 

Floating Rate Bonds (OTRV) – medium and long-term public debt instruments issued by the Republic of Portugal to retail investors, with maturities of up to 10 years, a variable interest rate, a nominal value of 1,000 euros per bond and a subscription limit of 1,000,000 euros per investor.

 

Funded Public Debt – public debt contracted to be fully redeemed in a budgetary period subsequent to the period in which it was incurred.

 

Maturity Date – date on which the nominal value of debt instruments is redeemed and, if applicable, the last coupon is paid.

 

Nominal Value – face value of securities that is redeemed at maturity and on which the interest is calculated.

 

Other Auction Participant (OMP) – The OMP status is granted to institutions which, not fulfilling the requisites to be an OEVT, contribute to the objectives defined for the management of government debt through their participation in the primary and secondary bond market. This may be considered as a first step in acquiring the OEVT status. 

 

Primary Dealer (OEVT) – the Primary Dealer (OEVT) status is granted to financial institutions who actively cooperate with the IGCP, E.P.E. and are authorized to participate in the issuance and trading of Fixed Rate Government Bonds (OT). 

 

Primary Market – market where the securities are issued and subscribed by investors or where the outstanding of securities previously issued is increased.

 

Refinancing Risk – risk of an excessive temporal concentration of maturities (to be refinanced) potentially having a negative impact on the cost of debt due to a deterioration in issuance rates or spreads caused by large volumes of debt to be issued (excess supply) or the need to accumulate substantial cash balances to address this concentration of repayments.

 

Refixing Risk – risk associated with the percentage of the portfolio that resets (or matures) within a specific time period.

 

Repurchase Agreement (Repo) – transaction that consists on the sale of a security with an agreement to repurchase that security at a pre-determined date and price (price of the initial transaction plus a remuneration given by the agreed repo rate).

 

Saving Certificates (CA) – debt instrument issued with the objective of capturing households’ savings. They are issued directly to individual investors and may only be transferred by the death of the holder.

 

Secondary Market – market where the securities previously issued in the primary market are traded.

 

Settlement Date – date on which occurs the transfer of securities from the account of the seller to the account of the buyer and of cash from the account of the buyer to the account of the seller. Usually, it takes place two working days after the transaction date.

 

Syndication – method usually used for the launch of new lines of Obrigações do Tesouro (OT).

 

Treasury Bill (BT) – security that represents a short-term Republic of Portugal’s loan, with a face value of one euro and time to maturity up to one year. BT may be issued at discount through auctions or limited subscription and are redeemed at maturity at its face value.

 

Treasury Bill Specialist (EBT) – The EBT status is granted to financial institutions who actively cooperate with the IGCP, E.P.E. and are authorized to participate in the issuance and trading of Treasury Bills (BT).

 

Treasury Certificate (CT) – debt instrument issued with the objective of capturing households’ savings. They are issued directly to individual investors and may only be transferred by the death of the holder.

 

Yield – return of a security.