How to Invest in Honduran Government Bonds and Central Bank Securities
Welcome to your guide for investing in Honduran Government Securities, including Treasury Bills and Bonds issued by the Central Bank of Honduras (BCH). Here, you’ll find all the key information you need to participate in auctions and secondary market transactions.
What Are Central Bank Treasury Bills?
Central Bank Treasury Bills are short-term debt securities (up to 1 year) issued by the BCH to regulate the money supply. These zero-coupon instruments are sold at a discount — you pay less than their nominal value and receive the full nominal amount at maturity. The investor’s profit is the difference between purchase price and nominal value, minus applicable capital gains tax.
What Are Central Bank Bonds?
Central Bank Bonds are medium- to long-term debt instruments (more than 1 year) issued by the BCH, paying a fixed return until maturity. At the end of the term, the investor receives the principal plus the agreed interest. Interest income is subject to income tax.
Who Can Invest?
- Individuals and companies, resident or non-resident, through authorized brokerage firms.
- Brokerage firms registered in the Public Securities Market Registry and authorized by the BCH.
- Financial system institutions.
- Public pension institutions and other public sector entities registered as direct depositors.
Where and How to Buy
Government securities can be purchased:
- At government securities auctions, held every two weeks on Mondays.
- In the secondary market via authorized brokers, if not purchased on auction day.
Minimum auction bid: L100,000.00, with increments in multiples of L1,000.00. All participants must be registered in the BCH Securities Depository (DV-BCH).
Auction Calendar
The BCH publishes an annual auction calendar on its website. Auctions for the general public are held biweekly on Mondays, while auctions for financial institutions take place daily.
How to Submit Bids
Two types of bids are accepted:
- Competitive: The investor specifies the nominal amount, term, and desired yield.
- Non-competitive: The investor specifies only the nominal amount; allocation is made at the average accepted yield for that term. The maximum for non-competitive bids is L500,000.00 per investor for securities in local currency.
Only one bid per investor per security is allowed in each auction. Payments are made via direct debit from the depositor’s account at the BCH.
Benefits of Investing
- 100% security on principal.
- Attractive fixed returns.
- High liquidity in the secondary market.
Participation Costs
Direct participants (financial institutions and public entities) pay a semiannual custodial service fee for DV-BCH use, as per BCH Resolution No. 418-12/2020.
Where to Get Auction Information
Auction details and results are available:
- At the Monetary Operations Department and Roberto Ramirez Library of the BCH, Boulevard Fuerzas Armadas, Tegucigalpa.
- On the BCH official website: www.bch.hn
- Through authorized brokerage firms and registered securities exchanges.
Historical Yields of Honduran Government Bonds
The chart below illustrates the average yields of Honduran Government Bonds over the last 10 years:
Source: Central Bank of Honduras (BCH)
