Investor's Guide to Municipal Bonds
Automatically translated summary. The full text is available in Romanian.
The Independent Think Tank “Expert-Grup”, in collaboration with the National Commission for Financial Markets (CNPF), has produced a guide for individuals and companies wishing to invest in municipal bonds issued by local public authorities in the Republic of Moldova, explaining how these financial instruments work.
Municipal bonds are issued by public offer, only through an investment firm licensed by the CNPF and after publication of the Public Offer Prospectus. The legal framework includes Law No. 171/2012, Law No. 397/2003, Law No. 419/2006 and CNPF Decision No. 18/1/2018. Investors lend money to local authorities for roads, water and sewerage or long-lived equipment, but the investment carries financial risks.
The bonds are debt securities, often a cheaper alternative to bank loans, used for capital investment or refinancing long-term debt. They are issued at nominal value, with fixed or floating interest, only in national currency, and redeemed at maturity. The Ministry of Finance, the CNPF, investment firms, the Central Securities Depository and the Moldova Stock Exchange take part. The project was funded by the Embassy of the Kingdom of the Netherlands.
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